Thin steel coil users hit by 20 per cent safeguard duty, says industry body

The imposition of safeguard duty on steel by the Centre has hit hard some 500-odd small and medium enterprises (SMEs) using thin steel coils, an industry body said.

"Some 500 SMEs using thin HR coil for making finished products like tubes and automotive components are facing the severe impact due to sudden imposition of the duty by the government without taking users views in the matter," H L Bhardwaj, secretary general of the Federation of Industries of India said.

"It has affected the viability of the SMEs who import thin gauge (below 2 mm thickness) coils, which is not adequately supplied by the domestic steel makers," he said.

When contacted, Nezone Tubes Ltd chairman M L Beswal told PTI, "We were surprised with the Director General-Safeguards recommendation of 20 per cent advalorem safeguard duty which came just two days after issuing notices seeking views from the interested parties."

"Our industry runs on wafer thin margin and absorbing the 20 per cent duty shock is not possible. The Centre should at least exempt the duty for those import contracts in which Line of Credit had been issued or contract signed before the notification," he said.

For the pipe industry 90 per cent of the input cost is that of HR coil.

"SAIL does not produce coils with thickness of 2 mm or below. Tata Steel produces limited quantity of 1.6, 1.8 and 2 mm. Though, JSW Steel produces a variety of such products, it sells the items to its long-term customers," Bhardwaj added.