Minimum Import Price for steel products will make SMEs absolutely 'non-competitive'
Updated: Dec 16, 2015 01:01:10pm
New Delhi, Dec 16 (KNN) The recent proposal mooted by the Centre to impose Minimum Import Price for the steel products will hit the MSME sector badly. The small sector opines that the move will make them absolutely non-competitive in domestic as well as international markets.
The Process Plant and Machinery Association of India (PPMAI), the apex body representing the process plant machinery companies, recently wrote to Prime Minister Narendra Modi pointing that “excessive protection” is being given to the steel sector in the country without consulting the capital goods sector.
Secretary of PPMI, V P Ramachandran in an interview with KNN said, “This will make us (small sector) absolutely non-competitive in domestic and international markets.
“Why only steel sector alone, which is 80 to 90 per cent family owned business, is being favoured that too at the prospect of killing the downstream capital goods and MSME sector who are the backbone to Make in India programme,” he had said.
Talking about the impact of Minimum Import Price on steel products on the MSME sector, Ramachandran said, “Why has the need risen for such a move? It must be looked into first. There are high import duties (inverted duty structure which is a disadvantage to downstream end users); safeguard duties and then the rupee devaluation from 45 to 67 now and also a host of anti-dumping duty on stainless steel in particular. If despite these protections, the domestic industry is making losses, there is something wrong somewhere.”
He asked that if the minimum import price is fixed unilaterally as per the directions of the steel producers, what the downstream industry will do.
“How will we compete in domestic and international markets. Due to inverted duty structure, already the downstream industry is stressed. Government should not set MIP without having a dialog with stake holders like us,” Ramachandran argued.
To check dumping, Ramachandran said, “If steel industry has problems due to dumping from China, Japan and Korea, why government is not initiating anti-dumping duty investigation against these imports. That is the most logical way to stop dumping. There is no need to invent new ways to protect steel industry. What wrong have we done ? Why our interests are being compromised.”
Suggesting the measures to be taken for the small sector, he said, “We should be allowed to retain our right to source the right quality materials and at right price from global markets in this deregulated environment . It is a fact that the Indian steel industry does not have the capability to cater to the total spectrum of required quality and form at all times. To be very frank We the downstream end users are the main backbone to achieve the success of Make in India vision and to compete in global markets. If our input prices are raised to make steel industry profitable, where will we stand.”
The total employment in downstream sector is higher than the employment in steel sector. At this rate , if the downstream industry closes down or there is lack of interest to invest in new capacities, how will the steel sector survive in the long run, he asked.
“To whom will they sell,” he said adding that the Government should not be buckling under one sector pressure. We expect the government to look at the overall picture of interdependence.
The association has taken up the issue with the Prime Minister, Finance Minister, Commerce Minister and Ministry of Heavy Industries.
“It seems the added pressures from the RBI and Banks to protect steel industry and to bale them out of NPA status has also been a reason for our woes. In the recent anti-dumping continuation, we had written to the finance ministry (also to Hon’ble PM and Commerce Minister) that the petitioner production had doubled in past 5 years and their market share had also gone up. Therefore there is no injury and the DGAD recommendation should not be notified. But it was notified last week,” he said.
He said that there are ways and instruments are in place that the government has to use to contain dumping.
“There should not be short cuts to support steel sector alone. We have also been facing competition from the global players and government needs to have a comprehensive policy to develop all sectors and not one sector i.e. Steel,” he said.
Meanwhile, he also pointed a case in the stainless steel sector recently, in which the DGSG from Finance Ministry had found that wrong data was submitted by the petitioner and this led to inflicting harassment and uncertainty to the downstream sector.
“The case was finally rejected because the petitioner had not been injured and the imports had actually fallen. No one learns a lesson from such instances and ensures that in future the MSME and CG sector are not put to inconvenience and taken for granted,” Ramachandran opined. (KNN Exclusive)
The Process Plant and Machinery Association of India (PPMAI), the apex body representing the process plant machinery companies, recently wrote to Prime Minister Narendra Modi pointing that “excessive protection” is being given to the steel sector in the country without consulting the capital goods sector.
Secretary of PPMI, V P Ramachandran in an interview with KNN said, “This will make us (small sector) absolutely non-competitive in domestic and international markets.
“Why only steel sector alone, which is 80 to 90 per cent family owned business, is being favoured that too at the prospect of killing the downstream capital goods and MSME sector who are the backbone to Make in India programme,” he had said.
Talking about the impact of Minimum Import Price on steel products on the MSME sector, Ramachandran said, “Why has the need risen for such a move? It must be looked into first. There are high import duties (inverted duty structure which is a disadvantage to downstream end users); safeguard duties and then the rupee devaluation from 45 to 67 now and also a host of anti-dumping duty on stainless steel in particular. If despite these protections, the domestic industry is making losses, there is something wrong somewhere.”
He asked that if the minimum import price is fixed unilaterally as per the directions of the steel producers, what the downstream industry will do.
“How will we compete in domestic and international markets. Due to inverted duty structure, already the downstream industry is stressed. Government should not set MIP without having a dialog with stake holders like us,” Ramachandran argued.
To check dumping, Ramachandran said, “If steel industry has problems due to dumping from China, Japan and Korea, why government is not initiating anti-dumping duty investigation against these imports. That is the most logical way to stop dumping. There is no need to invent new ways to protect steel industry. What wrong have we done ? Why our interests are being compromised.”
Suggesting the measures to be taken for the small sector, he said, “We should be allowed to retain our right to source the right quality materials and at right price from global markets in this deregulated environment . It is a fact that the Indian steel industry does not have the capability to cater to the total spectrum of required quality and form at all times. To be very frank We the downstream end users are the main backbone to achieve the success of Make in India vision and to compete in global markets. If our input prices are raised to make steel industry profitable, where will we stand.”
The total employment in downstream sector is higher than the employment in steel sector. At this rate , if the downstream industry closes down or there is lack of interest to invest in new capacities, how will the steel sector survive in the long run, he asked.
“To whom will they sell,” he said adding that the Government should not be buckling under one sector pressure. We expect the government to look at the overall picture of interdependence.
The association has taken up the issue with the Prime Minister, Finance Minister, Commerce Minister and Ministry of Heavy Industries.
“It seems the added pressures from the RBI and Banks to protect steel industry and to bale them out of NPA status has also been a reason for our woes. In the recent anti-dumping continuation, we had written to the finance ministry (also to Hon’ble PM and Commerce Minister) that the petitioner production had doubled in past 5 years and their market share had also gone up. Therefore there is no injury and the DGAD recommendation should not be notified. But it was notified last week,” he said.
He said that there are ways and instruments are in place that the government has to use to contain dumping.
“There should not be short cuts to support steel sector alone. We have also been facing competition from the global players and government needs to have a comprehensive policy to develop all sectors and not one sector i.e. Steel,” he said.
Meanwhile, he also pointed a case in the stainless steel sector recently, in which the DGSG from Finance Ministry had found that wrong data was submitted by the petitioner and this led to inflicting harassment and uncertainty to the downstream sector.
“The case was finally rejected because the petitioner had not been injured and the imports had actually fallen. No one learns a lesson from such instances and ensures that in future the MSME and CG sector are not put to inconvenience and taken for granted,” Ramachandran opined. (KNN Exclusive)
Loading...
