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The stainless steel sector has voiced major distress before the government, ahead of the full budget presentation on July 5. The Indian Stainless Steel Development Association (ISSDA), India’s apex stainless steel industry body, has sought an immediate custom duty relief on importing key raw materials that can help boost domestic stainless steel production. As a key recommendation in its submission to the government, ISSDA has apprised that Ferro-Nickel and stainless steel scrap attract an import duty of 2.5% each and are unavailable in the country; hence need to be necessarily imported. This elevates the overall cost of stainless steel production in the country. Commenting on the subject, President, ISSDA, Mr K K Pahuja, said, “The Indian stainless steel industry is at an inflection point. Government support for availability of raw materials at zero duty will provide the much required relief to the domestic stainless steel industry, as it is currently ailing due to this high input cost burden resulting in non-competitive products. ISSDA has worked out that any revenue loss due to relieving basic customs on Ferro-Nickel and stainless steel scrap will be more than made up by a higher domestic production and its subsequent effects on the economy. The new government has rightly embarked on giving a big push to industrial growth. We urge the Ministry of Finance to not see the duty on raw materials as a revenue source; rather, consider the larger vision of kick-starting invincible economic growth along with higher manufacturing growth and job creation.”
Despite the brimming global trade challenges, India continues to be the second largest producer and consumer of stainless steel. The demand for stainless steel is growing at ~8-9% across an array of applications, but the domestic industry is marred by the dual challenge of excessive dumping by other major stainless steel producing countries like Indonesia and China, and the non-availability of key raw materials in the country. Moreover, the capacity utilization of the Indian stainless steel industry is stagnant at 70% as cheap imports engulf the market share and erode the competitiveness of domestic players due to high raw material prices.
Major steel players have already filed a safeguard duty petition against the threat of cheap imports in the face of trade wars and a new wave of protectionism sweeping across the world. It is noteworthy that the Indian stainless steel industry has proven to be self-sufficient while producing world-class quality products. It is an urgent petition to the government to address this long-pending industry demand for zero duty on key raw materials which are not available in the country, further boosting the stainless steel economy in the nation. Apart from enhancing the country’s production and product quality, this step will also contribute towards Hon’ble Prime Minister’s vision of a US$ 5 trillion Indian economy by 2024, along with realizing the ‘Make in India’ initiative.