Amid concerns over cheap imports of ferro alloys from Malaysia, Indian ferro alloy producers on Monday called the Steel Ministry to undertake protective measures.
"A significant amount of ferro alloys is imported in India from Malaysia as they were able to produce the same at a much lower cost. Power is the major input for producing ferro alloys and it constitutes about 30 per cent of the total cost. Power tariff in India is on a higher side as compared to other ferro alloy producing nations.
"Safeguard measures could help to protect the industry," said the Indian Ferro Alloy Producers' Association Chairman D.B. Sundara Raman.
Cross-subsidy in power tariff further puts the non-captive producers at a disadvantage and the difference in power tariff between India and Malaysia is $20 per MWh, he said.
On the safeguard measures sought by the industry, Steel Ministry Director Anupam Prakash said the association represents 80 per cent of the ferro alloy sector and it can seek for the duty after applying for the same with a note mentioning that imports are damaging the industry.
"There are procedures for imposing safeguards. If the association makes an application mentioning that imports are damaging the industry, the Directorate General of Safeguards investigates the case and come up with recommendations. And accordingly notifications are issued," he said.
Raman said upcoming supplies of manganese alloys with lower power tariff from Malaysia and Indonesia is expected to bring down profitability.
"In 2016, 3,65,000 tonnes of extra capacity has come into the market and additional 1,80,000 tonnes is expected to come in 2017," he said.
According to association, India produces around 3.5 million tonnes of ferro alloys and the Rs 23,000 crore industry employs around one lakh people.
Out of this India consumes around 2.3 million tonnes of ferro alloys and the rest 1.3 million tonnes is exported which earns foreign exchange of around Rs 8,900 crore, Raman said.
Prakash said: "Exports incentive schemes like Merchandise Exports from India Scheme and other schemes are countervailing. Advantages of such scheme could be lost if we impose any scheme which is not under the guidelines of the WTO."
--IANS
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