Engineering exporters object to MIP for steel imports

Engineering exporters' body EEPC today strongly objected to the government move to restrict steel imports by way of fixing Minimum Import Price (MIP).
"There is no justification for the government to help handful of big steel makers, by way of fixing MIP, at the cost of millions of SME export firms which will be forced to pay much higher price for their raw material," Engineering Exports Promotion Council (EEPC) said in a statement.
The government is considering imposing a minimum import price for about a dozen steel products. The move is aimed at checking cheap imports, especially from surplus producers like China, Japan and South Korea.

If the MIP is imposed, it would be a "complete destruction of the the medium and small scale engineering sector," EEPC said.
In a detailed presentation to the Commerce Secretary Rita Teotia, Chairman of EEPC India T S Bhasin said that MIP would significantly push the import price of a variety of steel products.
"This is being done to protect the handful of primary steel producers on the grounds that they are over-leveraged and their bank loans could become NPAs," he alleged.

Since June 2015, the steel sector has been provided a range of protection including raising of import duties by five per cent on all categories of steel and imposition of safeguard duties on more than 62 steel products, the statement added.

"All this is being done without taking into consideration that the impact of such action will have on the small scale sector of the economy which contributes nearly 45 per cent of industrial production and 35 per cent of exports," it added.
The engineering exports, largest contributor in the country's export basket, have fallen by over 14 per cent in the first eight months of the current fiscal to USD 39.85 billion.
Further, the EEPC also sought increase in the duty drawback rates since the rate hike in the recent past has been quite marginal for most of the items.