Punjab MSMEs urge Central Government to roll back MIP on steel

Ludhiana, June 4 (KNN) Punjab Micro, Small and Medium Enterprises (MSMEs) have urged the Central Government to roll back implementation of MIP on Steel Products or direct the Indian Steel makers to reduce the price of raw material.‎

Avtar singh President of Chamber of Industrial and Commercial Undertakings (CICU) said that the Central government in December 2015 imposed MIP on 173 steel products ranging between $341 and $752 per tonne to deter cheap imports from China, Russia, Japan and South Korea. He said the MIP is hitting the engineering exports which have declined by around 20% during the last fiscal.

Steel manufacturing majors are hiking the price of raw material every month ranging from Rs. 1,200/- to Rs. 1,500/- per ton, which is a causing concern for the MSME Industry in Punjab, said the President adding that this hike has hit the user industry hard and has especially put Micro, Small & Medium Enterprises (MSME) Sector in quandary.

He further explained “the hike is eating into MSMEs working capital funds. Engineering exports, Start-Up projects as well as Make-in-India are also suffering significantly. This has come as a jolt to the exporters who have been worst hit and now are unable to keep to their commitments with overseas buyers. Exports are hit hard and booking of further export orders is being affected.”

Upkar Singh Ahuja, General Secretary said that MIP on Steel Products is protecting hefty margins of Indian Steel Makers such as JSW Steel, Tata Steel Ltd, Jindal Steel & Power Ltd, Essar Steel India and Kalyani Steel. This measure has raised the cost of raw material for engineering products significantly. Segments like Auto & Auto Parts, Cycle & Cycle Parts, Industrial & Electrical Machinery and other products of MSME Sector, which are operating on low margins and are facing cut throat competition.

They have further requested them to come out with a compensatory mechanism to make up for the increased raw material price for engineering industry. (KNN Bureau)