“The MEIS scheme will be replaced by some other scheme for specific industries but if the benefits under the Merchandise Exports from India Scheme (MEIS) is not restored, it will account for a 2 percent loss per tonne for the ferro alloys industry,” Manish Sarda, Chairman, Indian Ferro Alloys Producers Association (IFAPA), told SteelMint over phone.
“The Government has a vision to increase exports and become a factory for the world, but the withdrawal of such benefits to the exporters will have negative implications,” he opined.
Threat to competitive edge in the seaborne market
Manish Sarda urged the government to recognize that India is number one exporter of silico manganese in the world and a contributor to the foreign currency reserves of the nation for decades.
I think the Indian ferro alloys producers will have to increase its rates per tonne basis which may lead to uncompetitive pricing in the export market,” he informed.
He further maintained, “The government has to consider that other ferro alloys producing nations have cheap and subsidized electricity.” “For example, Malaysia – where power is cheap at 2.20 paise per unit. Power tariff in Norway and Australia is also very cheap and in South Africa, they have a special tariff for ferro alloy smelters.”
“So in this scenario, the Indian ferro alloys industry will be burdened a lot in terms of competitive pricing and will lose its market share in the global marketplace,” he said while expressing his deep dejection.
Raw material concerns
“Already we are handicapped by non-availability of good quality manganese ore and the ore available is of high phosphorus and low Manganese content (inferior quality). So for producing export-grade manganese alloys we are totally dependent on manganese ore imports from South Africa and Australia and Gabon, and on which there is a duty of 2.5 percent.” “The very least the government can do is to remove all the duties of basic raw material like manganese ore and nullify the impact of MEIS to that tune, remarked Mr. Sarda.”
It has been stated by the Finance Ministry that MEIS benefits failed to boost exports. To which Manish Sarda countered, “MEIS benefits may fail to boost exports but at the same time if it’s withdrawn without looking at the competitiveness and protecting the domestic industry then it’s a bigger mistake and will further shrink the presence of Indian players in the global marketplace.”
The IFAPA Chairman concluded by saying, “We will be taking up the matter at all government levels and will explain to them the ground realities.”
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