 "Two leading auto industry bodies send SOS to govt on steel imports")
The two leading auto industry bodies—Automotive Component Manufacturers Association of India (Acma) and Society of Indian Automobile Manufacturers (Siam)—have urged the Ministry of Steel and the Ministry of Heavy Industries to lift restrictions on certain steel imports, citing concerns over potential disruptions to automobile production in India.
Earlier in the day, Minister for Heavy Industries and Steel H.D. Kumaraswamy announced that the government is considering a proposal to impose a safeguard duty on imported steel. India's finished steel imports reached a seven-year high of 5.7 million metric tonnes during the April-October period of this financial year.
At a press conference on Thursday, Vinnie Mehta, director general of Acma, said the central government has clamped down "very heavily" on steel imports following a sudden surge.
"The fact remains that the import of automotive steel is a very small proportion, just about five per cent, of the overall import that happens. The imports are just in kilos, they don't even go into tons and quintals in some of the grades of steel. Because the government intends localisation, there have been a slew of QCOs (quality control orders), which ACMA has welcomed," he explained.
According to the process, the importer now needs a NOC (no objection certificate) from the government by justifying the need for import of a steel grade, which falls under one of the QCOs.
"Unfortunately, at this juncture, the NOCs are not coming by. Both -- ACMA and SIAM -- have made representations to the Ministry of Steel and Ministry of Heavy Industries and we are hopeful because we have a common minister (Kumaraswamy). He will also be able to see the challenge being faced by the automotive industry because in some cases, the inventory levels have run so low that they may have to stop production. It is definitely a challenge that needs to be addressed," Mehta noted.
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"Acma and Siam believe that localisation is the way forward. Import is not in the interest of anyone but in certain cases, the technologies are so specialised and the amount is just a few kilos so the localisation is not justified...We have written a letter. We have a common minister. We have a fair chance of being heard. We are keeping our fingers crossed," he explained.
Mehta revealed that the automotive components industry in India grew 11.3 per cent year-on-year to Rs 3.32 trillion in the first half of the current financial year. This growth has come at a time when the volume sales of the major carmakers have been seeing a downturn in the current fiscal year.
"It is quite impressive. In value terms, the industry continues to grow. The bigger vehicles, the SUVs, continue to grow. The high end two-wheelers are also doing good," he explained the reasons behind the 11.3 per cent growth.
"We continue to maintain our surplus in exports, which grew by seven per cent year-on-year to $11.1 billion in the first half of the financial year. About one-third of our exports go to the US while another one-third of our exports go to Europe. Remaining exports to other regions," he added. Auto component industry's imports increased by four per cent year-on-year in the first half of the financial year to about $11 billion.