The recent imposition of five per cent import duty on tinplates, used for manufacturing container packaging, has hit the industry which was already plagued by rising prices of the metal and depreciation of rupee, top sources said today.
The Rs 3,000 crore industry comprising of over 1,000 units, many of whom being small and medium enterprises caters to the packaging requirement of food and beverage companies.
Sanjay Bhatia, vice president, Metal Container Manufacturers' Association told PTI that the last budget had removed the duty on tinplates.
Subsequently, rupee depreciated against dollar by 20 per cent, while the price of tinplate internationally has gone up by about 50 per cent. Now the government has also imposed five per cent import duty, crippling the industry which survives on thin profit margins.
He said the government has imposed 5 per cent duty primarily to protect the domestic steel industry, as there is a threat of cheap imports from Thailand and China. However, there is negligible import of Tinplate from these countries.
If the industry decides to pass on the price rise to consumers, there could be strong resistance and the industry would lose market, Bhatia said.
The can manufacturers face huge competition from those making packaging material of paper, glass and plastic, the input costs of which have gone down over the last few months, he said.
The industry consumes about 4 lakh tonnes of tinplate, a specialised product, per year of which about 2 lakh tonne is produced by Tata Tinplate, a sole producer in the country while the remaining is imported, he added.
