ACCI (Punjab) writes to Union FM regarding imposition of 20% safeguard duty on steel imports
Author(s): City Air NewsP D Sharma. Ludhiana, September 18, 2015: P.D.Sharma, President of Apex Chamber of Commerce & Industry (Punjab) has written a letter to Union Finance Minister, regarding imposition of 20% safeguard duty on steel...
cityairnews
Sep 18, 2015 12:30
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P D Sharma.
Ludhiana, September 18, 2015: P.D.Sharma, President of Apex Chamber of Commerce & Industry (Punjab) has written a letter to Union Finance Minister, regarding imposition of 20% safeguard duty on steel imports.
He added industry is well aware of the global economic down turn. Steel sector is also getting mauled. Undoubtedly any government will endeavour to save this vital sector, though with due caution.
Consumers of steel are also very vital part of our economy. Single minded protection to one may not be justified if it works to the disadvantage to the downstream steel consumers.
It need no reminding that our steel giants have been fixing their steel prices with reference to global rates. They have been adding all imaginary costs to this reference rate for bringing steel to our country. Even imaginary burden of custom duty have been getting added.
The above method of fixing steel prices have been declared illegal in some other countries. Such defaulters have even been punished in South Africa and Europe.
Sharma requested the minister to tell these steel giants to desist this illegality and immoral way of fixing price in future at least.
He further said, “After giving a huge savoury dose to the drowning steel sector you (FM) are well within your rights to tell them to follow legal ways in fixing prices. The prices have to be necessarily fixed on commercial grounds.”
This safeguard is certain to affect adversely the downstream user industry in general and vulnerable steel based MSME sector in particular. This sector is very sensitive to the country in many respects. The quantum of safeguard may kindly be reviewed in favour of users.
Further, he said government has imposed 20% safeguard duty on some imported steel products for 200 days. This includes Flat, Hot Rolled Coils used in Automobiles and various Light Engineering industries including cycle industry.
The imported steel largely comes from China, South Korea, Russia and Japan.
USA, Canada, Mexico, Australia and European Union have initiated antidumping proceeding against some countries.
Steel producers have started increasing steel rates heftily.
The steel makers of India say that 1,62,000 tons of Hot Rolled Coil were imported in September last year at an average price of $584 per ton. In august this year 4, 10,000 tons were imported at $405 per ton. Thus the import volumes have been doubled and prices have fallen a quarter.
This is the fourth intervention by government in the last few months to protect the domestic steel industry.
With this protection the secondary steel producers do not get any protection.
It is rather sad when one says, on the bases of past experience, that our main steel producers have been exploiting the situation at the cost of consumers.
It is an open fact that our steel giants have all the major factors of production to their great favour. Raw materials and labour costs are the major relative advantage to our steel producers compared to others.
Unfortunately our steel giants have not given due care to their core functioning of steel production. Thus they have not tried to improve the efficiency of production.
This view is drawn from the fact that our steel producers have gone all around to invest their resources and attention somewhere else including foreign countries and may be in noncore sectors, said Sharma.
Date:
Friday, September 18, 2015
