New Delhi, Feb 10 (KNN) The Government’s decision to impose minimum import price (MIP) on 173 steel products has been strongly criticized by the downstream steel industry. The industry has alleged that the move has been taken for the interest of the larger steel players.

The associations from across the country have been writing letters to Prime Minister Narendra Modi urging him to revoke the duty imposed.

The industrialists criticized the decision and said that their production costs would go up by atleast 25 per cent.

Naveen Jain, Chairman of Muzaffarnagar based Dayachand Engineering explained the loss saying, “Earlier the landed price of Chinese wire rod was USD 365 on which the import duty was at 10 per cent which was USD 36.5. Hence the final cost of the rod was USD 401.5.”

Post safeguard measure, he explained, “MIP would be USD 451, import duty at 10 per cent comes to USD 45.1, safeguard duty at the rate of 20 per cent comes to USD 99.2 and the total cost comes to around USD 595.32 now.”

Jain said, “Our product is MIG welding wires, which is 99.9% is steel had not been given any protection from cheap Chinese import. We are in small scale sector and can not a bear a small shock of such cheap import and will die in the first stroke hence immediate action is required to be taken.”

Suggesting the way forward, the entrepreneur said, “Same level of protection should be provided to our industry i.e. MIP and safeguard duty. We should also be reimbursed with the difference in MIP & actual international price along with safeguard duty component on our consumption of steel based on settled input output norms.”

According to the Chamber of Small Industry Association (COSIA), the cost of India steel is much higher in comparison with the steel imported from countries like Russia and China.

In India 93 per cent industries are MSMEs using steel in one way or the other for their production.

“The MIP order will affect their competitiveness and will also have an adverse impact on Make in India. Not only this, it will also affect the capital goods industry and many infrastructure projects where MSMEs are involved,” COSIA said.

In this context, the industry body has written a letter to PM Modi to look into the issue and “balance” the interest of MSMEs and for the cause of Make in India.

“It seems that the biggest beneficiaries of the MIP will be all the big companies including the Steel Authority of India,” COSIA wrote in the letter.

Further, Steel Wire Manufacturers Association of India (SWMAI) has said, “The industry is facing severe loss due to the safeguard duties. The raw materials are not available and we used to depend heavily on imports.”

The association cried that with the safeguard duties it would be difficult for the small and medium enterprises to survive.

“They want to protect the bigger fishes. Nobody wants to listen to the concerns of the small players,” Secretary General of SWMAI, T Banerjee said.

The similar voices are echoing across the country from different sector.

Executive Secretary of Thane Small Scale Industries Association, Sonawane, said, “We have taken up the issue with the Government of India and have urged them to intervene. We have to face the brunt of the safeguard duty which protects the big steel manufacturers.”

The Process Plant and Machinery Association of India (PPMAI), an apex body representing the country's process plant manufacturers, has written a letter to PM Modi Modi opposing the MIP.

Secretary General of PPMAI, V.P. Ramachandran said that the move is affecting the manufacturing sector forcing them to approach the PM.

He also said that Indian industry is becoming non-competitive and the programmes like Make in India will be affected due to this.

In the letter, PPMAI said if steel industry, including stainless steel, is favoured with so much of excessive protectionism including curb on imports with anti-dumping duties, additional safeguard duties and MIP, it will end up as a burden on the economy and scare away investors in other productive capital equipment as well as downstream MSME areas. 

PPMAI includes companies like Larsen & Toubro, Godrej, Thermax, Praj Industries, Toyo Engineering, ThyssenKrupp Industrial Solutions (India) and others.

Meanwhile, the ship breaking industry which was facing a bad time due to low demand for steel from the local as well as international market has hailed the move.

Ramesh Aggarwal, Secretary of Ship recycling Industries Association said that the industry was going through a bad phase, but now things would possibly change with the imposition of MIP of steel.

He said that there is complete stop in demand for steel as infrastructure projects in the country have stalled.

“Demand from the local Industries gas gone down,” he added.

The central government on Friday set MIP for steel products that are likely to make the imported steel products costlier than the domestic ones. The move comes after several complaints made by the steel companies over cheap Chinese imports hitting the India steel companies. (KNN Exclusive)