MUMBAI: The city-based Process Plant and Machinery Association of India (PPMAI), which represents the capital goods and process equipment manufacturing industry in the country, has urged the government to reduce the import duty on steel and stainless steel and other metal products to 7.5 per cent level to keep capital goods industry in good health.
"The Indian capital goods sector, presently with an output of Rs 2,50,000 crore, contributes nearly 2 per cent to the GDP and creates over 10 million employment. We have urged the government to reduce import duty on on raw materials including steel and stainless steel to 7.5 per cent from 12.5 per cent," PPMAI Secretary General V P Ramachandran said in a statement here.
"As far as raw material steel is concerned, import duties have been raised in several steps from 5 per cent to 10/12.5 per cent for carbon and alloy steel and to 7.5 per cent in case of stainless steel. The steel prices have also risen sharply in the World market as also within the country to provide a breathing space to the industry.
Further a large number of steel products are covered under specific trade actions such as anti-dumping / safeguard duties... etc. There are 19 major products which come under the MIP jurisdiction. Therefore there is no immediate threat of the steel industry getting into trouble if the import duty rates are lowered from the current level to 5-7.5 per cent. This will also correct the inverted duty rate regime to bring fairness in the supply chain," Ramachandran said.
"While the import duty on capital goods may be retained unchanged, the government should reduce import duty on steel and stainless steel and other metal products to 7.5 per cent level so that capital goods industry remains in good health. The current situation is anomalous and this has happened due to continuous increase in import duty on steel. Therefore, the way out of this will be to reduce the import duty on raw materials/inputs used in the manufacturing of capital goods," he said.
One of the main factors that inhibited growth of the capital goods manufacturing industry in the country to its full potential is lack of high quality component manufacturing at competitive costs. In order to reverse this situation, it is very essential, the basic raw material; high grade steels and stainless steels which are mostly imported are made available locally at highly competitive prices to the manufacturers of components and equipment; 90 per cent of them also being Small and Medium En ..
There is a distinct threat to the domestic capital goods industry growth if it is not placed in a competitive environment due to high import duty on raw materials. The capital goods industry continues to remain dependent on foreign technology in key areas and imports of components and raw material, which are critical given the specifications provided in the design/technology.
Source: economictimes.indiatimes.com