Modi and Trump
This government is indeed very business friendly, While Mr Trump is said to be planning to go back on globalisation in the interest of creating more jobs, Mr Modi is thinking of raising bars against imports to help businesses create wealth for the country.
Otherwise why would he allow MIP to be brought in for Steel industry and now for Aluminium industry !
Commodity prices in India are governed by global trends in prices. The domestic producers have the protection through import tariffs, falling exchange rates and logistics advantages. In case of the above two commodities also through the benevolence of almighty GOD bestowing abundant availability of ore and coal.
The tariffs were raised by 50% in the last budget. It did not satiate the producers’ greed so Minimum Import Price (MIP) was brought in the picture - something inherently absurd !
Once an innovation like MIP is accepted in one item the others cannot be left behind. So aluminium industry is now demanding further duty protection + MIP It is said the production cost for aluminium metal is around $1300; the bench mark LME is trading at $ 1770+75 but the producers are unhappy and the government is keen to meet their demand on a quid pro quo basis. After all, huge amount of investment is in danger of going waste and in the process the nation may be poorer !!
It is an urgent matter for the country ! and perhaps therefore the adversely affected user industry is being warned not to plead its case before the quasi judicial forum (meant to hear petitions of aluminium producers for slapping safe guard duties) to avoid unnecessary delays in slapping the duty.
A pertinent point - the ultimate sufferer is the government, the user of downstream electrical products for T&D infra; but then the government can always pay for the profligacy of its owners the politicians.
About Author: The Author is a senior industrialist and past president of industry body FISME.