EEPC airs concerns over high domestic steel price

At a time when domestic steel sector was facing slackening demand, engineering exporters' body EEPC India Thursday raised its concerns about the high domestic steel price compared to the international price saying, it was leading to a non-competitive scenario in downstream engineering exports.

In a statement after a review meeting with the Union commerce and Industry minister Piyush Goyal, the EEPC said that high prices of domestic steel, a crucial raw material, as compared to international market, has resulted in non-competitiveness of Indian downstream engineering exports.

"It is critical that our exporters get steel at international prices and we request the government to address this issue at the earliest.

"If we get steel at global prices, our exports will have tremendous buoyancy and we will be able to weather the protectionism with full force," EEPC India Vice chairman Arun Garodia said in the backdrop of the withdrawal of US preferential duty treatment.

The recent meeting was held with the steel ministry where it was decided to form a committee under the Directorate General of Foreign Trade (DGFT) to look into this issue.

Benchmark hot rolled coil (HRC) prices in China have gone below the crucial USD 500-a-tonne mark, coming down by USD20 a tonne within a fortnight.

HRC prices in India are ruling at about USD 578 a tonne (Rs 40,500), according to Icra.

EEPC highlighted its problems to the government about the protectionist measures being faced by the engineering exporters in the European Union market.

The other obstacles for exporters include the uncertainties arising out of WTO compatibility for incentive schemes like MEIS and interest equalization scheme.

"There is an uncertainty in the minds of engineering exporters getting into long term contracts. We suggest that the un-rebated tax scheme be introduced at the earliest so that the phasing out of the existing incentives creates less disruption to our exports," EEPC said.

Besides, small exporters to OFAC countries like Iran, Syria, Saudi Arabia face major problem due to caution listed by the RBI and the issue needs to be addressed, it said.