The Government of India (GoI) has ruled out the request of rescinding the free trade agreement for Ferro Alloys in particular.
Association of Southeast Asian Nations (ASEAN) is an organization created to enhance cooperation among the Southeast Asian states. India formally signed free trade agreement (FTA) for services and investments with ASEAN in 2014. As per India-ASEAN Free Trade Agreement, the trade among the India and other member countries will be duty-free.
Malaysia has been emerging as the biggest threat for the Indian Ferro Alloy market. Hence, the Indian producers requested GoI to terminate the deal specifically for Ferro Alloy in order to avoid loss of market. However, this request has been turned down by the government.
Malaysia has the low power cost advantage with a mere cost of INR 2-2.5/kwh. It could put Indian Ferro Alloy producers into grave perils.
OM Holdings, Pertama and Sakura Ferroalloys established as some of the biggest plants with production capacity of 0.7 MnT. Malaysia has emerged as the single largest threat to the Indian manganese alloy market. It will be difficult for the Indian producers to remain price-competitive with their Malaysian counterparts, and are likely to lose market share in Asia, in what has been their traditional markets so far.
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