In a relief to the domestic electrical equipment industry, the ministry of steel has decided to scrap the proposal of imposing MIP (minimum import price) on import of steel.
Senior officials of IEEMA met the Hon’ble Steel Minister Shri Birender Singh and appealed that MIP would prove to be detrimental for the survival of downstream domestic electrical equipment industry, such as, cables, towers, transformers, rotating machines, conductors, switchgear, etc.
MSME units, in particular, would be adversely affected; they would be rendered non-competitive as raw material prices would increase.
Imposition of MIP would discourage imports and lead to unjustified increase in the domestic price of steel and steel products, thereby increasing the raw material prices for the users of steel in manufacturing of finished electrical equipment, IEEMA observed in a release.
Moreover, the foreign suppliers having access to cheaper supplies of steel would have a price advantage and dump their finished electrical equipment to India. At the same time, the domestic suppliers would be at a price disadvantage on exports front too.
Commenting on the issue Harish Agarwal, President, IEEMA said, “We welcome the decision of Ministry of Steel of not allowing MIP to be imposed on steel. The Hon’ble Minister has saved the industry, particularly small scale, downstream and export oriented units.”
Sunil Misra, Director General, IEEMA said, “Steel is a major part of inputs to the downstream industry as it adds more value addition and helps in generating employment. A large part of the Steel goes, through the downstream industries, into nation building in the form of infrastructure development. Any increase in cost of steel, because of imposition of MIP, would increase the cost of infrastructure and ultimately increase the cost to the consumers.”
What is MIP?
Minimum import price (MIP) is that price below which no imports are allowed. According to information available, the request for imposing MIP had come from major primary steel producers including Steel Authority of India and JSW Steel. They sought the imposition of MIP as large scale cheap imports, for instance from Indonesia, were affecting their domestic sales. Besides, rising raw material costs was adding to the burden of primary steel producers. It may be recalled that the Union steel ministry, in February 2016, had imposed MIP on a number of steel products, for a period of one year.
Featured photograph showing hot rolled steel coils is for representation only
