New Delhi, Sept 10 (KNN) The engineering exporters of the country have approached the Commerce and Industry Minister Piyush Goyal urging him to ease import curbs on steel.

“Engineering goods exporters, battling under global slowdown and rising domestic costs, have approached Commerce and Industry Minister Piyush Goyal, under the aegis of EEPC India, seeking modification of a recent DGFT notification that would result in restrictions on import and increase in price of steel, a crucial raw material for the engineering export goods,” EEPC India said in a release.     

In a letter to the Commerce and Industry Minister,  EEPC India Chairman Ravi Sehgal said,  the DGFT notification of September 5, 2019 , in the name of  Steel Import Monitoring System (SIMS), has mandated compulsory registration for import of most of the  steel products ( under Chapter 72 and few products under Chapter 73 and 86 of ITC (HS). 

Engineering exports are down by around 2% in the first four months in the current fiscal.

The bouncing back may be difficult given the fact that EU has further slashed the quota on steel products shipped from India .The Section 232 imposition and withdrawal of GSP by the USA has already restricted  India's exports to the major market. Under these circumstances, any rise in prices or restrictions on steel imports would be adding to the problems of the engineering exporters, the statement added.    

It states that an importer can apply for registration not earlier than 60th day and not later than 15th day before the expected date of arrival of consignment. For such registration, specific registration fee has also been specified.

While it is believed that this system has been brought in on the lines of the US “Enforcement and Compliance Steel Import Monitoring and Analysis System (SIMA)”,  in the United States, there is no application fee for the SIMA licence for imports. The license may be filled out up to 60 days prior to the date of importation/expected date of entry and will be valid for 75 days, said Sehgal.

In contrast, as per the changes brought in by the DGFT, the SIMS requires importers to submit advance information in an online system to obtain an automatic Registration Number. The importer can apply for registration not earlier than 60th day and not later than 15th day before the expected date of arrival of import consignment. For such registration, specific registration fee has also been specified.

Engineering exporters fear that these changes would do more than just monitoring imports. The new rules may, in fact, restrict imports as it has made it cost based registration system and limited the time-period of registration for imports. If the unintended consequence of steel imports monitoring leads to l import restriction, this will surely manifest in higher domestic steel prices, which are higher than international rates and would  impact engineering exports , which are  facing headwinds in the major world markets.  

The EEPC also stated that the notification is also silent on what happens to High Sea sales and imports under Advance Athorisation and Duty Free Import Authorisation (DFIA) schemes. Also, what happens to imports wherein documents come to the importer say, just before four or five days of the landing of vessel.

As the objective of the SIMS Notification is to monitor primarily steel imports, it should be made in line with the USA’s SIMA with no registration fee, the council has said.  The registration may be up to 60 days prior to the date of importation/expected date of entry and be valid for 75 days. The inner limit of 15 days be done away with. Further, issues relating to Advance Authorisation, DFIA imports as also, High Sea sale transactions be clarified. 

The engineering exporters' apex council also said that the mechanism for providing steel at export parity price for MSME engineering exporters be immediately notified. Besides, the scheme for Rebate of State and Central Taxes and Levies (ROSCTL) be announced at the earliest, '' as in our estimation, 7-8% of taxes remain un-refunded in the production chain and are exported out with our price making us uncompetitive''

The MEIS scheme should continue concomitantly for six months post the announcement of ROSCTL scheme, it added. (KNN Bureau)