The Indian stainless-steel industry has urged the Union government to slash the existing import duties on key raw materials in the upcoming Union Budget 2021-22.
In its recommendations to the Ministry of Finance, Indian Stainless Steel Development Association (ISSDA), the apex body representing the domestic industry, has appealed to exempt the 2.5 per cent Basic Customs Duty (BCD) levied while importing key raw materials, including ferro-nickel and stainless steel scrap. Presently, both these raw materials are unavailable in the country, making their import mandatory. ISSDA has also sought abolition of the existing 7.5 per cent import duty on graphite electrodes, a critical component in stainless-steel manufacturing, as they constitute a major share of input cost. Additionally, ISSDA has sought an increase in the import duty on stainless-steel flat products to 12.5 per cent, to bring it at par with carbon steel products, in order to check undue imports. ISSDA asserted that these measures, if undertaken, will not only boost domestic manufacturing but also curb undesired stainless-steel imports, thus spurring the Make in India movement.
The government has set in motion a wave of reforms to boost economic growth and the Indian stainless-steel industry is ready to contribute to the Atmanirbhar Bharat vision. “This is the optimum time for the government to stop considering essential raw materials as source of revenue and provide stimulus to domestic manufacturing by exempting duties on importing critical raw materials. This step will improve the competitiveness of the domestic industry and in turn, provide impetus to the hard hit MSME segment, which has a 40 per cent share in the domestic stainless-steel industry,” observes KK Pahuja, President, ISSDA.
He further explained, “Undue imports have harmed the domestic industry which is operating at 60 per cent of its capacity and is financially stressed after COVID-19 related disruptions. We request the government to rationalise the duty structure in order to catalyse the revival of this sector that has immense potential to generate additional jobs.”
India continues to be the second largest producer and consumer of stainless-steel in the world. High input costs, coupled with imports from FTA countries, have eroded the global competitiveness of Indian companies. Undeterred by trade challenges, the Indian stainless-steel industry has consistently demonstrated 8-9 per cent growth in the past few years, as compared to about 5 per cent exhibited globally. This growth was made possible due to capacity building and modernisation initiatives undertaken over the last 15 years, along with aggressive market development efforts by the industry. The demand for stainless-steel in India is growing at a compound annual growth rate (CAGR) of ~8-9 per cent across a spectrum of applications. Moreover, a lower per capita consumption of stainless steel at ~2.5 kg against the world average of 6 kg highlights an immense untapped potential for stainless-steel usage in India. Stainless-steel provides sustainable solutions with lower lifecycle costs across diverse applications, such as Public Transport, Buildings & Construction, Process Industries, and Food Processing etc.
Established in 1989, Indian Stainless Steel Development Association (ISSDA) was formed with the explicit objective of diversifying the applications of stainless steel and increasing usage volumes in the country. Through the focused efforts of ISSDA and its member companies, the widespread and visible use of stainless steel in different walks of life is all too evident, especially in the Architecture, Building & Construction (ABC) and the Automotive, Railway and Transportation (ART) sectors. The technical strength of ISSDA is derived from its close association with the Nickel Institute, the International Stainless Steel Forum (ISSF), and close collaboration with more than 20 stainless steel development associations around the world. As a result of these efforts, India has now emerged as the second largest stainless-steel producer and consumer in the world.
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