Safeguard duty: EEPC fears DGS' move will have negative impact

Criticising the recommendation by the Directorate General of Safeguards (DGS) to impose 20 per cent safeguard duty on import of flat steel products, Engineering Export Promotion Council today said the move would have a negative impact on small and medium engineering exporters.
"We have no issue with the government helping the big steel magnets but to do it at the cost of SMEs, which use these products for a range of domestic and export purposes, is totally unjustified.
"Why should SMEs suffer at the cost of large manufacturers who are better equipped to lobby hard," EEPC Chairman Anupam Shah said in a statement.

He said these exporters will have to bear the high cost of basic raw material while the benefit of the same would be reaped by the big corporates.
"Due to the duty, prices of their products will rise by at least 15 per cent and this will make their products uncompetitive globally because the Chinese are already dumping. This implies that at least 25 per cent of engineering exports will be affected," he said.
Shah said the recommendations of the DGS to impose safeguard duty on flat steel products should be rejected summarily.

"If this is not done, lakhs of jobs in the SMEs would be sacrificed for the sake of helping the large and powerful steel manufacturers," he said.

Industries including automobiles, auto ancillaries, fabricated steel products such welding, forming, metal working, domestic appliances, water tanks and some white goods would be affected.
In the last three years from FY13 to FY15, the CAGR of the flat rolled products of iron and steel products has been negative to the extent of minus 9.9 per cent. These imports have fallen from USD 1.8 billion in FY13 to USD 1.4 billion in FY15.
"If the safeguards duty is imposed on the basic raw material, the engineering exports which are already suffering would get a further hit at least to the extent of 20 per cent on the employment," he added.