The slowdown has cast its shadow over the valve and cock industry of Punjab. While domestic sales have been affected by 25-30 per cent, exports have declined 80 per cent.
Majority of the valve and cock (used for regulating pressure) units are concentrated near Jalandhar and generate an annual turnover of Rs 700 crore. At present, there are 325-350 units in Punjab and come under the micro, small, and medium enterprises sector. The other centres include Ahmedabad, Mumbai and Pune.
The products from here are exported to West Asia, America, Europe, South Africa, Australia and New Zealand. Of the total production, exports account for about 20 per cent.
Speaking to Business Standard, All India Valves and Cocks Manufacturers Association founder president Vimal Jain said, “The ongoing slowdown has affected our sales to the extent of 25-30 per cent. Also, the economic crisis in US and European countries has impacted exports by 80 per cent.”
He said China had already grabbed a market share of about 20 per cent of the Rs 2,000-crore valve and cock market of India.
Echoing similar sentiments, DRP metals, partner, Desh Bandhu Sharma, said, "The units need some package so that they can bail out themselves. The excise duty, which has been lowered to 8 per cent, should be brought down to 4-5 per cent."
India and China both import raw material like brass and gun metal from European countries. But while China provides raw material at subsidised rates, in India it's almost 25-30 per cent costlier than China. “The high taxes on raw material make the input cost higher,” said an exporter.
Moreover, the freight subsidy by the state government has not yet been disbursed. The government had announced the subsidy so that the manufacturers here get the raw material at the same price as the states, which are nearer to seaports.
Jain informed that the units had formed a cluster, which is registered with the Ministry of Micro, Small and Medium Enterprises. The industry proposes to set up a common facilitation centre for testing and development of product for MSMEs.
