Minimum import price hurting exports and MSME units | S C Ralhan, President, FIEO

S C Ralhan, President, FIEO said that exporters are already working on low margins and facing cut-throat competition besides huge volatility in currency. The imposition of minimum import price resulting in increase in steel prices by 15% has further blunted the competitive edge of Indian engineering sector. While engineering exports have declined by about 16% in first 11 months of the current fiscal, auto & auto components, cycle & cycle parts, hand tools, industrial & electrical machineries are the worst sufferer.

President, FIEO said that the MIP imposed on 173 steel products covers roughly 80% of steel imports and thus impact engineering sector hugely. Government needs to strike a balance between the interest of few large steel companies at the cost of thousands of micro, small & medium units which together provides more than 100 times of the jobs provided by large steel companies, added FIEO Chief. The imposition of MIP has resulted in anomalous situation as manufacturing units catering to both exports and domestic market may import at international price for exports while for domestic production at MIP from the same supplier and the huge differential in the two prices may subsequently land them in the net of investigating authorities.

Ralhan said that Government should provide steel to all export companies particularly in MSME sector at the international prices without compelling them to go through advance authorization route which requires a minimum quantity of imports for economic viability and thus not suitable to their requirement.