New Delhi: India’s stainless steel importers, including utensil manufacturers, have snubbed the domestic industry’s demand for imposition of import duty on the alloy, saying the move is aimed at benefiting a ‘single producer’.
“Import duty on stainless steel which had remained untouched till date will benefit a single monopoly industry,” said Process Plant & Machinery Association of India Secretary, V.P. Ramachandran.
The Association, which is an umbrella organisation of stainless steel importers and utensil producers, has shot a letter to Steel Secretary P K Rastogi requesting him not to persuade the finance ministry for the imposition of up to 20% import duty on the alloy as demanded by domestic producers.
“The body representing the country’s stainless steel producers—Indian Stainless Steel Development Association—has said yesterday that they have approached the steel and the finance ministries for levying up to 20% import duty on the alloy to check cheaper shipments from China, Korea and Taiwan amid slackening demand and volatilwants the industry to survive,” Indian Stainless Steel Development Association President, N.C. Mathur said.
Giving the rationale behind the rebuff, Ramachandran said that the Indian stainless steel industry has a poor range of products with near monopoly of ‘one producer’, and so small scale firms need to import value-added alloy to compete globally.
“Moreover, the import in stainless steel flat products take place in those grades and sizes, which the domestic industry does not manufacture,” he added.
Echoing similar sentiments, stainless steel pipes and tubes producer Patnamani Commercial Head J H Bhatt said that putting roadblocks on the import of the alloy will create monopoly of low quality domestic producers in the market.
“It will also deprive the small stainless steel users in gaining competitive edge in the domestic and global market,” he said.
“The industry consuming imported stainless steel is already reeling under the impact of depreciation in the value of the Indian currency, which has gone down as much as by 20% since the beginning of this fiscal,” Ramachandran added.
Any increase in import tariffs will add to inflationary pressure. The government, in fact, waived import duties from steel merely to bring down inflation and a reversal to a high duty will be counter-productive, the lobby observed.
However, Mathur—also a director at India’s largest stainless steel producing firm JSL Ltd has said that if the demand is not met there could be cut in production and layoffs.
Prices of essentially imported raw materials such as nickel and ferrous melting scrap has come down to $11,000 a tonne and $300 per tonne from their peek, earlier in the year.
Nickel was priced at $25,735 a tonne in April and ferrous melting scrap at about $650 per tonne in June, 2008.
“The time cycle for the delivery of imported raw materials is 8-10 weeks, input prices of late have further gone down in that time span, propelling buyers to cancel their orders based on higher priced input,” he has said, justifying the demand.