The imposition of Minimum Import Price on steel products will surge raw material costing for engineering products by about 6-10%, says Engineering Export Promotion Council of India (EEPC).
Engineering segments such as auto and auto parts, industrial and electrical machinery, products of MSME sector, which have been tussling with low margins and severe competition, will face further jolt amid MIP imposition on steel products.
Mr T S Bhasin, Chairman of EEPC India said, “The introduction of MIP on steel will lead to increase in raw material prices by about 6-10% for engineering products, depending upon nature of the product. This in turn will severely affect engineering exports, which have already dipped by 15% in 1st nine months of FY16.”
He further added that the government must provide steel at global competitive prices and EEPC India requests the government to provide a compensatory mechanism for high steel prices, which the MIP entails on domestic prices.
Mr Bhasin appeals the government for an new International Price Reimbursement Scheme (IPRS) to be introduced immediately. Moreover, the safeguard duties should be removed and not extended further as the MIP has already been fixed.
It may be mentioned that the Advance Authorisation route is not used by the MSME sector and has many limitations. Hence, unless a price reimbursement mechanism is worked out for engineering exporters, there will be no revival of exports in the next 6 months, the EEPC chief cautioned.
Leave a Reply