MIP on steel hitting exports, MSME units : FIEO to KNN

New Delhi, Mar 19 (KNN) Government's imposition of Minimum Import Price (MIP) on steel resulting in increase in steel prices by 15% has further hit the competitive edge of Indian engineering sector, said S C Ralhan, President of Federation of Indian Exporters Organisation (FIEO).

In a reply to KNN, he said the Government should provide steel to all export companies particularly in MSME sector at the international prices without compelling them to go through advance authorisation route which requires a minimum quantity of imports for economic viability and thus not suitable to their requirement.

He further added that engineering exports have declined by about 16% in first 11 months of the current fiscal, auto & auto components, cycle & cycle parts, hand tools, industrial & electrical machineries are the worst sufferer.

President, FIEO said that the MIP imposed on 173 steel products covers roughly 80% of steel imports and thus impact engineering sector hugely. Government needs to strike a balance between the interest of few large steel companies at the cost of thousands of micro, small & medium units which together provides more than 100 times of the jobs provided by large steel companies, added FIEO Chief.

Showing his concerns, he said that the imposition of MIP has resulted in anomalous situation as manufacturing units catering to both exports and domestic market may import at international price for exports while for domestic production at MIP from the same supplier and the huge differential in the two prices may subsequently land them in the net of investigating authorities.

Exporters are already working on low margins and facing cut-throat competition besides huge volatility in currency, he added. (KNN Bureau)