Foreign steel Punjab's only hope

In the absence of government action on the increasing steel prices and unpredictable the raw material market, imported steel, which is the most used raw material, seems to be a lifeline for the industries in the region.

Scrap and steel, imported from Russia and the African and Arabian countries, are not only cheap but are also superior.

The reason for the increased demand in the region, especially in Punjab, is the cost factor, because it is almost Rs 2,000-3,000 per tonne cheaper than the steel available in the domestic market.

S K Dhir, owner of Dhir Steels in Mandi Gabindgarh, said, "Seventy per cent of the market is dominated by the scrap imported from the other countries primarily because they are cheaper and the other reason is its non-availability in the country due to lack of technical advancement".

No doubt the demand was always there for the imported raw material but for the last few months an increasing trend has been observed with total rise of 15-20 per cent in the demand by the industry, he said.

The problem being faced by the industry is that in the absence of any incentives and freight concessions, the price almost touches the same level as in the domestic market, which includes loading and unloading charges, complained Ashwani Kohli, Senior Vice-president, Chamber for Small Exporters of Phagwara.

The government should therefore take necessary measures to encourage the import providing the platform to the international companies. This would not only open more choices for the industry at the competitive prices but would also finish the monopoly of major domestic players and traders.

Kohli said it would further reduce the input cost to Rs 1000 per tonne to the industry. Elaborating further on the issue, Opinder singh, Assistant Director, Engineering Export Promotion Council, Jalandhar, said that there would be open competition for the domestic players making the ultimate source of raw material for the industry with the relaxed norms for the import.

"But, the main problem is lack of incentive and the industry demands that the government should immediately announce the freight concessions and zero import duty to encourage the import of the steel" he added.

It is also believed that the presence of explosives in the imported scrap had made the authorities alert and many restrictions have been imposed on the import of steel, said V K Vaid, export advisor, Victor Forgings.

The government should set up the corporations that would buy the steel in bulk facilitating the small industries as it is observed that the small-scale industries are financially incapable to meet the price of the imported raw material, he suggested.