Capital Goods Industry Writes To PM And Ministries Against Excessive Protectionism Demanded By Single Stainless Steel Producer In The Country

New Delhi, April 12 , 2016 Process Plant and Machinery Association of India (PPMAI), an apex 51 years old industry body representing the Process Plant Manufacturers in the country have written to Prime Minister and Ministry of Steel, Commerce , DHI and Finance expressing concern at excessive protectionism including initiation of Anti circumvention investigation and latest move to impose Minimum Import Price (MIP) on stainless steel at behest of single corporate house against all World Trade Organisation (WTO) norms.

Process Plant and Machinery manufacturers which include major companies include Larsen & Toubro(L&T) , Godrej, Thermax, Praj Industries, Aker Solutions, Toyo Engineering., ThyssenKrupp Industrial Solutions (India). (UHDE), Ion Exchange and BGR Energy Systems have strongly objected and expressed serious concern at perpetual protectionist environment being created excessively in favour of a single stainless steel corporate in the country without consulting the capital goods and industry sector.

“Every day panic is being created in the minds of CG, SMEs and MSMEs through reports on MIP to be introduced and recently anti circumvention case being initiated at the request of one petitioner JSL. Exclusive Protectionism to single private sector player in stainless steel will endanger the make in India vision. India can be isolated in global business if our industrial and trade policies are based on narrow perspectives of individual industry. India should not be seen as a protectionist nation with unpredictable policies. Excessive protectionism will end up as a burden on the economy and scare away investors in otherwise productive Capital Goods as well as downstream MSME areas which most importantly will generate employment for the youth in our nation.” Said MR V.P.Ramachandran , Secretary, PPMAI .

“There have been several attempts by one domestic Indian stainless steel manufacturer for last several years to utilize trade instruments : frequent requests for anti-dumping , safeguard investigations, seeking Increase in import duty despite the duty rate being inverted, creating technical barriers to trade through draft quality control order on stainless steel and more recently initiation of Anti circumvention investigation and reports on seeking MIP on stainless steel. Such demands and actions will aggravate the access of required raw materials and intermediates as per International standards to the Indian end user market at global prices. “ said Mr Ramachandran.

“Huge Import from China are basically of substandard stainless steel and do not conform to prime quality standards be it global or Indian standards. Surely government can ban imports of non standard products. Also a very revealing fact is that 60% of the domestic production of stainless steel does not conform to any international or Indian standards. These are unregistered proprietary grades which is alarming from the safety and health of citizens since utensils , wares and equipments are being made from them. This can easily be corrected by banning imports or domestic manufacturing, sales and stocking of stainless steel not conforming to International standards” said Mr Ramachandran .

“Capital Goods business is based on stainless steel products specified as per international standards only. BIS for stainless steel industrial products is neither specified by any buyer – be it EIL or BHEL or NTPC or Indian Railways nor it is comprehensive enough to include most stainless steel grades. Higher import duty or any other trade barrier on these industrial grade products will hurt the process and plant industry which is manufacturing critical high end products “

“ More over before initiating anti circumvention investigation , Designating authority seems to have overlooked that the petitioner does not represent majority share of the market. Furthermore, Imports of stainless steel coils and sheets wider than 1250mm are going on for decades and not something which started after imposition of anti dumping order in 2009. Authority should have looked into this reality. Initiating the investigation without any public hearing or consultation has put thousands of Capital Goods & end users into a state of confusion and uncertainty.” He added.

“Authority should also know that petitioner invested thousands of crores rupees of public funds in last 5 years in setting up plant to produce above 1250mm because there is huge and growing demand from the industrial segment for coils and sheets wider than 1250. Infact even 2000mm.”he said .

“The Director General (Safeguards) Ministry of Finance had issued Final Findings in this Safeguard Investigation on March 24, 2015 terminating the ongoing investigation from Jindal stainless with a recommendation of no safeguard duties. It was concluded by the Safeguard Authority that losses incurred by the Stainless petitioner were due to their internal reasons and not due to imports. It was wrongly petitioned that imports had risen whereas on verification it was concluded that the imports had actually gone down in that case.” Said MR Ramachandran.

“DG Safeguards in its final findings had emphatically concluded that the losses are due to reasons other than imports. Therefore the petitioner should be advised to improve operational and internal efficiencies, as concluded by DG Safeguards and focus its attention on reducing their costs which will help domestic end user segment to be globally competitive.” Said Mr Ramachandran .

“Stainless Steel cannot be made a monopolistic business in India. Furthermore stainless steel produced by domestic mill/s does not always meet the buyer’s specifications for critical applications. Even some of the most common grades also are not available in desired product forms. Protectionism will hurt us immensely.

PPMAI urges government to reject protectionism being requested by the single petitioner in stainless steel sector – be it for MIP or anti circumvention or quality control order for industrial grades. Indian economy and employment depends on much bigger and strategic downstream segments than stainless steel alone. ” He added.