Mumbai, Nov 11 (UNI) Small scale industries using imported stainless steel have petitioned to Finance Minister P Chidambaram strongly opposing any move to raise the import duty on stainless steel products.
The move mooted by Union Steel Minister Ram Vilas Paswan, who had sought a ten per cent levy on imported stainless steel, to protect the domestic manufacturers would only be counterproductive, Process Plant and Machinery Association of India (PPMAI) secretary V P Ramachandran said in a letter to Mr Chidambaram, which was released to the press here.
''The process plant manufacturers in the country use high grade steel for manufacturing critical components of machinery. Indian stainless steel industry has a poor range of products with near monopoly of one producer with Salem stainless plant not having its own slab production. So the import on stainless steel, which had remained untouched till date, will benefit the single monopoly industry,'' he said.
Moreover, the Indian companies are importing those grades and sizes of stainless steel which do not directly affect the domestic manufacturers. Above all, the industry consuming imported stainless steel was already reeling under the impact of depreciation of the value of the rupee from Rs 40 a dollar to Rs 50 a dollar, he pointed out.
''The stainless steel products already have a tariff protection of 25 per cent (a five per cent import duty plus the depreciation of the value of the rupee from about Rs 40 a dollar to the range of Rs 48 currently means an additional 20 per cent tariff protection).
Importantly, the industry is not hit by normal inflationary pressures as the main raw materials for it such as nickel, ferro-nickel and melting scrap are largely imported and their prices have nosedived in the past couple of months,'' he added.
''Any increase in import tariff on stainless steel will only lead to a corresponding increase in the price of stainless steel for a wide range of products of daily use of a common man such as utensils, household appliances as well as high alloyed stainless steel grades for process equipment, machinery, oil and gas, energy, water treatment and infrastructure projects. This will add to inflationary pressure only if the domestic prices are to rise in line with the import costs. The government is working hard to bring inflation under control for the benefit of the people at large. Now, introducing a high duty regime will certainly prove counter-productive,'' the letter stated.
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