Punjab MSME Sector Worst Hit by Imposition of Minimum Import Price on Steel

Ludhiana, June 2, 2016: Sh.Avtar Singh President CICU, in a statement released today said Central Government in December 2015 imposed Minimum Import Price (MIP) on 173 Steel products ranging between US$ 341 to US$ 752 per ton to deter cheap imports from China, Russia, Japan & South Korea. MIS is having a serious debilitating impact on engineering exports which have already declined by about 20% during last fiscal. Steel manufacturing majors are hiking the price of raw material every month ranging from Rs. 1,200/- to Rs. 1,500/- per ton, which is a causing concern for the MSME Industry in Punjab. This hike has hit the user industry hard and has especially put Micro, Small & Medium Enterprises (MSME) Sector in quandary. The hike is eating into MSMEs working capital funds. Engineering exports, Start-Up projects as well as Make-in-India are also suffering significantly. This has come as a jolt to the exporters who have been worst hit and now are unable to keep to their commitments with overseas buyers. Exports are hit hard and booking of further export orders is being affected.
Sh. Upkar Singh Ahuja, General Secretary said that MIP on Steel Products is protecting hefty margins of Indian Steel Makers such as JSW Steel, Tata Steel Ltd, Jindal Steel & Power Ltd, Essar Steel India and Kalyani Steel. This measure has raised the cost of raw material for engineering products significantly. Segments like Auto & Auto Parts, Cycle & Cycle Parts, Industrial & Electrical Machinery and other products of MSME Sector, which are operating on low margins and are facing cut throat competition. This sector is facing sudden escalation in raw material price, giving a further jolt to the exporters. This move has caused an inflammatory impact on the entire manufacturing sector. At the cost of protecting cartel of aforesaid primary steel manufactures, the entire steel consuming industry should not be made to suffer.
They have strongly appealed and urged upon Sh. Narendra Modi, Prime Minister and Sh. Narender Singh Tomar, Steel & Mines Minister, Government of India to roll back implementation of MIP on Steel Products or direct the Indian Steel makers to reduce the price of raw material at December 2015 level for survival of Micro, Small & Medium engineering industry, which is already reeling under adverse economic scenario. They have further requested them to come out with a compensatory mechanism to make up for the increased raw material price for engineering industry.