Steel import duty hike may widen CAD, hit engineering exports: EEPC India
New Delhi: Raising the import duty on steel or steel products will widen the current account deficit and severely hit engineering exports from the country, EEPC India said Thursday. "Steel is a mother of the raw materials for a host of sectors, especially the engineering manufacturing.
"Its domestic prices have sky-rocketed in the past few years, thanks largely to the protection given to the steel makers by a slew of government measures which have proved detrimental to the interest of exports," Engineering Export Promotion Council of India Chairman Ravi Sehgal said.
In a presentation to the Commerce Ministry opposing any hike in import duty on steel, EEPC India highlighted how steel prices have shot up in the past two years.
Illustratively, price of boiler quality steel plates was Rs 39.95 ex stock yard in July, 2016. This has gone up to Rs 51 in July 2018, an increase of 21 per cent, having a direct impact on cost of engineering exports. Besides, the delivery period has increased to 4 to 6 months from just a few weeks earlier, it claimed.
"By no stretch of imagination, steel can be considered as non-essential or non-necessary imports. The entire focus on the Make in India programme is to scale up value addition in manufacturing within the country - by enabling low cost raw material, so that more and more value added products can be made for exports and for domestic consumption," EEPC India said.
Sehgal highlighted the need to focus on increasing exports for bridging the CAD gap, rather than curtailing essential imports like steel, observing that all-out efforts must be made in this regard and any more increase in duty on steel imports would lead to a huge weakening of India's export competitiveness.