Steel industry demands reduction of import duty on raw materials to promote ‘Make in India’
The Indian stainless-steel industry has appealed to the central government that the current import duty on raw materials should be cut in the forthcoming Union Budget 2021-22. In a proposal sent to the Finance Ministry, the Indian Stainless Steel Development Association (ISDA), the apex body of the domestic stainless-steel industry, has appealed that the 2.5% BCD on imports of major raw materials like ferro-nickel and stainless steel scrap be canceled. At present these raw materials are not available in the country due to which their import is mandatory.
ISDA has also demanded that the 7.5% import duty applicable to graphite electrodes used in stainless-steel manufacturing be removed as it is a large part of the cost. At the same time, ISDA has sought to increase the import duty on the finished product of stainless-steel by 12.5% so that it can be brought on par with carbon steel products and to prevent unfair imports. ISDA said that taking such steps will increase domestic manufacturing and encourage ‘Make in India’ initiative.
The President of ISDA, Mr. KK Pahuja said, “The Government has taken many corrective initiatives in view of promoting economic growth and the Indian stainless steel industry is ready to contribute to the goal of “Self-reliant India “. This is an appropriate time when the government considers the raw materials required for the industry as a source of revenue and simplifies its import and encourages the domestic manufacturing industry. This initiative will provide flat opportunities to domestic producers and increase their competitiveness.
This will strengthen the currently disordered MSME units. The MSME sector has a 40% stake in the domestic stainless-steel industry. In addition, domestic imports have suffered due to excessive imports. The domestic industry is facing financial challenges following the difficulties associated with Covid-19 and operating at 60 percent of its total capacity. “We urge the government to restructure the tariff system so that the stainless steel industry, which has the potential to generate additional employment, is encouraged”, he said.
Second largest producer and consumer
India is the second-largest producer and consumer of stainless-steel in the world. Higher manufacturing costs as well as imports from FTA countries have affected the global competitiveness of Indian companies. Despite the challenges related to trade, the Indian stainless-steel industry has been registering a steady growth of 8-9% over the past few years; while the growth rate globally has been 5%.
This growth has been possible due to modern initiatives, capacity building and industrial development undertaken by the industry in the last 15 years. The demand for stainless steel in India is growing at a compound annual growth rate (CAGR) of 8-9% in every sector. However, the per capita consumption of stainless steel is 2.5 kg in India, while the global average is 6 kg. It is clear that there is enough scope for stainless-steel usage in India. Due to rust-free and low maintenance costs, stainless-steel is an economically reasonable and sustainable solution for various sectors, including public transport, building and construction, processing industries, food processing.
