MSMEs Struggling with Sudden Escalation in Raw Material Price: EEPC India
EEPC India said that the industries, mainly belonging to the MSME sector, which have low margins, are facing cut throat competition now.
NEW DELHI: The user engineering industry especially the MSME units are facing difficulty because of sudden escalation in raw material price, Engineering exporters body EEPC India said adding that the Minimum Import Price (MIP) on steel is resulting in an inversion of duty with imports of finished goods increasing at a far more rapid speed than raw material.
“Segments like auto and auto parts, industrial and electrical machinery, products of MSME sector, which in any case have low margins and are facing cut-throat competition are finding it difficult to be globally competitive,” it said.
With imports of steel and iron products increasing and raw material in the form of pure play steel and iron dropping, it is a clear case of inverted duty, something not good for India’s drive on manufacturing, said EEPC India.
“Any inversion in duty at this stage would be a big setback to the governments flagship programme of Make in India where the entire focus is on taking the country several notches up on the value and technology chain so that we become a factory of the world,” EEPC India Chairman TS Bhasin has said.
According to EEPC India, imports for the finished goods in the form of products of steel and iron, measured by volume increased in the range of 22.5 per cent and 51 per cent between June and August this year.
On the other hand, imports by way of steel and iron used purely for raw material dropped between 16 and 33 per cent in quantity terms between June and August.
DGFT had extended the minimum import price (MIP) on 66 steel products till October 4, 2016.
The MIP ranges between USD 341-752 per tonne. The government earlier levied MIP on 173 steel products ranging from USD 341 to USD 752 per tonne on 5 February 2016, which was valid for six months from the date of the notification.