The Association of Indian Forging Industry has expressed shock at the appeal of the Indian steel companies to increase the import duty from 5% to 15%:
AIFI, which AIFI has been consistently expressing that domestic steel prices should be equivalent to ex factory prices in China, vide a release sent to SteelGuru said that “This helps them claim as usual that Indian steel prices are lower than the international market. If the domestic steel prices are reasonable, why would anyone import the same?”
The AIFI urges the government not to increase the import duty as otherwise it would lead to a spiraling rise in prices once again. Increase in price of steel will have a two fold impact. It said that
1. Render Indian auto component manufacturers uncompetitive even as it is the price of steel in India is higher than ex factory prices internationally. This will lead to more job losses in the industry which is already reeling due to less demand.
2. Spike up inflation which means interest rates cannot be cut and an internationally loose monetary policy cannot be pursued. These measures are essential to cushion the economy from falling into a deep and long drawn recession.
AIFI reiterates the call to the Government of India and all policy makers to allow steel prices to reduce to international levels or even lower so that Indian auto component manufacturers can regain export competitiveness and survive. Thereby the Indian economy would bounce back on export lead growth.
AIFI established in 1965, is the spokes body of the Indian Forging Industry.
Source : SteelGuru