Steel industry to marginally benefit from GST

The Union Government has categorically stated that it is willing to provide protection to the domestic pipe manufacturers against unfair trade practices. “While we are willing to give protection, it comes with a sense of responsibility so please be very-very responsible.

If prices start rising dramatically, then it is difficult to fend off charges of cartelisation. It is not in government’s interest to buy steel at a very high prices,” said Syedain Abbasi, joint secretary, Ministry of Steel while addressing an Assocham conference in New Delhi.

Urging the pipe industry to look at it very hard, he said, “We want to provide you the protection so that you can survive, beyond that if you want to do then you will have to compete in the open market without any protections.”

Noting how efforts have been renewed after the new US president took over to limit the import of steel and steel products to a significant extent in to the US, Abbasi said, “In such a situation, when stronger economies in the world are looking at protecting their industry, we have to be very clear that our domestic markets also require to be protected against unfair trade practices. That is something, at least in the steel industry, we are very clear about.”

After the policy on Domestically Manufactured Iron & Steel Products (DMI&SP) announced there were concerns expressed by organisations like Gail, IOC as well as the Petroleum Ministry about a significant hike in prices. “My request would be that while we are willing to provide protection, it would become very untenable to us to continue if you suddenly find that the prices in the next tender for Gail pipeline have gone up by 30 per cent,” said Abbasi.

On resolution of non-performing assets (NPAs) in steel sector, he said that it depends not only on GST and DMI&SP but also on pickup in steel demand, prices and other related factors.

Abbasi informed that after the intervention of Prime Minister's Office (PMO) the problems created by the railways in giving ‘way leave agreement,’ to cross the slurry pipeline either underground or over-head across railway land have abated.

“This is again a huge market for pipe manufacturers to exploit and I would request the pipe manufacturers to promote with ministries and state governments as in terms of transportation and logistics this is a far cheaper, environmentally safer and better option. This is something which needs to be promoted all across and pipe manufacturers would be doing themselves a disservice if they do not have a strong promotional arm to promote these issues,” said Abbasi.

He further said that even the Steel Ministry is working in terms of promotion of steel by looking at replacement of a lot of cement and concrete with steel because it is quicker to implement and in terms of life-cycle costs it is cheaper.

He also highlighted that there has been a constant refrain in the pipe manufacturing industry that capabilities do not exist in the country to manufacture API grade steel or that they are too costly, especially which require X-65 and above.

“I would like to assure the pipe manufacturers that there are enough capabilities within the country to manufacture those grades of steel whether it is plates, coils or sheets and we would encourage you to buy from domestic producers,” he said.

He added, “Pipe industry in India has a great future as it has exported enormous quantities of pipes all over the world and the quality of manufacturing is well-known internationally and with renewed stress on infrastructure and Make in India, the best days of pipe industry are ahead of them.”