| -2 |
-7 |
| |
| Currently, a 5 per cent duty is imposed on steel imports. But under the proposed amendment, import duty will be reduced to nil. This makes domestic market more price competitive as cost between domestic prices and imports are expected to narrow down. This may result in domestic players reducing prices, thus affecting their realisations as well.
|
| |
| Indian players have significant cost advantage while supplying to West Asia compared with the European and Japanese players. After levying additional duty, the competitive advantage was expected to be wiped out.
|
| |
| Thus making Indian exports more expensive than competitors. India currently exports about one million tonnes of steel pipes and tubes of the country's total production of two million tonnes.
|
| |
| Meanwhile, the industry has started incorporating protection norms in contract designs for exports deals to protect themselves from any such levy in future.
|
| |
| An official from Man Industries, the largest pipe manufacturer, claimed that the company would not be affected at all as exports levy was not applicable on export-oriented units (EoUs) for exports against advance import licence.
|
| |
| The company exports about 95 per cent of its output, while the bearing would be very little on the remaining 5 per cent sales in the domestic market.
|
| |
| Welspun Gujarat, according to a company executive, caters to niche market which continues to boom. The real problem was temporary contracts under execution, which would have faced problems. Otherwise, the price rise could easily be passed on to consumers in the niche market segment, an analyst said.
|
| |
| According to industry sources, manufacturers who export against import licences may reap a good margin compared with small manufacturers, who source raw material locally and may be affected badly.
|
| |
| Meanwhile, pipe manufacturer PSL has started informing overseas customers about a possible levy and its impact on exports prices. PSL sells 90 per cent of its produce in the domestic market.
|
| |
| Industry sources are apprehensive about a glut in the domestic market. Coupled with an import duty cut, the prices in the local market may decline by 15 per cent, according to them.
|
| |
| Confirming talks with overseas suppliers, Ashok Punj, MD of PSL, said, "We are going slow on price quotation to existing customers because of uncertainty over levies." |
| |
