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The government has imposed a minimum import price (MIP) ranging from $341 to $752 per tonne on 173 steel products to provide relief to local steel makers hurt by an increase in cheap imports of these items.
A notification of the Directorate General of Foreign Trade (DGFT) said, “MIP is introduced against 173 HS Codes (iron and steel products).”
The MIP conditions are valid for six months from the date of the notification (February five) or until further orders, whichever is earlier, it said. However, the MIP will not be applicable on imports under the advance authorisation scheme and high-grade pipes used for pipeline transportation systems in the petroleum and natural gas industry. The notification said imports/shipment contracts (under Letter of Credit) entered into before February five are also exempted from the MIP conditions.
However, the user industry objected to this decision. Engineering goods exporters’ body EEPC India said the MIP will lead to further erosion in engineering exports. It sought from the government a compensatory mechanism to make up for the increased raw material price which the distressed exporters, mostly in the SME segments, will be made to bear following the protection given to the large steel manufacturers.
“The MIP will raise the cost of raw materials for engineering products by about 6-10 per cent. This will severely hurt engineering exports that have already declined by 15 per cent in the first nine months of this fiscal,” Mr. T. S. Bhasin, Chairman of EEPC India said.
The Advance Authorisation route is not used by the MSME sector and unless a price reimbursement mechanism is worked out for engineering exporters, there will be no revival of exports in the next six months, he said.
Indian Stainless Steel Development Association welcomed the move but said stainless steel products should also have been given the benefit of the MIP.