Stainless steel industry body ISSDA requests the government to reconsider the revocation of import duties on stainless steel (SS) which is adversely impacting domestic manufacturers and is feared to bring MSMEs on the verge of bankruptcy. Low-priced imports could significantly reduce the market share of Indian SS manufacturers catering to downstream demand from the utensils, kitchen and household appliance segment.
The Indian government announced the revocation of import duties on stainless steel in February while presenting the Union Budget for FY2021-22. Industry participants are now requesting the government to reconsider its decision as it is hurting the SS domestic producers. Indian Stainless Steel Development Association (ISSDA) fears that MSME (Micro, Small and Medium Enterprises) sector might be on the verge of being bankrupt if the government takes no further action.
Issda has voiced serious concerns regarding the adverse effects of the import duty withdrawal along with other important MSME associations including Rajasthan Stainless Steel Re-rollers Association, The Wazirpur Industrial Estate Welfare Society, Delhi; Jagadhri Stainless Steel Re-roller Association, Haryana; and Stainless Steel Re-rollers Association, Ahmedabad. These major stainless steel associations have requested the government to act against the flooding of the market with stainless steel products from China and Indonesia which will injury small enterprises.
Issda President, K.K Pahuja said that six trade remedies were announced, three of which relate to stainless steel, which is just 3pc of the overall steel industry in India. This has affected the stainless steel industry disproportionately, including the MSME sector which is about 35pc of the domestic stainless steel industry. Currently, MSMEs are producing 1.5mn mt, which is just under 50pc of total capacity utilization, says Pahuja.
With the revocation of import duties, the domestic market will be flooding with relatively low-cost Chinese stainless steel goods into India. China has a 30pc surplus of stainless steel capacity and also backs up the Indonesian stainless steel industry by installing production capacities of nearly 3mn mt in the past couple of years. Plans of adding another 2.5mn mt are in the pipeline. Consumption of stainless steel in Indonesia is less than 20,000mt, this will result in the dumping of subsidized and substandard stainless steel products into India from these countries.