A day after the Centre set a floor price for imports of steel to check dumping of cheap steel in India, voices of dissent have started resurfacing.
India’s largest engineering exporters body Engeering Export Promotion Council (EEPC) on Saturday said the government action will only protect large steel manufacturers and not the small ones.
The introduction of Minimum Import Price (MIP) on steel products will raise the cost of raw materials for engineering products by about 6-10 per cent, EEPC said in a statement.
The government’s decision will have a serious debilitating impact on engineering exports, which have already declined by 15 per cent in the first nine months of the current fiscal, it said, and urged the government to come out with a compensatory mechanism to make up for the increased raw material price.
EEPC said that the MIP will only protect the large steel manufacturers. Engineering exports declined by 15.68 per cent in December, to $5.82 billion.
Import tariffs
Economists and policymakers have warned the government against imposing import tariffs because it impacts downstream industries and has implications on international treaty obligations.
Last week, Reserve Bank of India Governor Raghuram Rajan too has appealed to the government to be careful while imposing tariffs, when the costs were falling around the world, as it would not only have inflationary impact but also a rise in cost for small businesses.
“For every happy domestic businessman, whose prices are raised by the imposition of tariffs on imports, we have an unhappy domestic businessman whose costs are raised by the very same tariffs, as well as unhappy consumers,” Rajan recently said.
A ‘strong-as-steel’ move
Centres fixes MIP on certain steel products
Duty ranges from $341 per tonne to $752 per tonne
Sheets and strips of flat-rolled products attract an MIP of $445
Flat-rolled and coated products attract $752
