MSMEs manufacturing products with steel depend largely on the exports of the products from other countries. Thus, they do not prefer the hikes in steel imports that are going to be implemented as a protective measure for the Indian Steel industry. According to MSMEs, it may protect the large players but will lead to difficulty in MSME’s survival. They depend largely on the imports for their business. Thus, with hikes in import duty, their manufacturing cost will rise by 10-20% impacting their business core.
Why MSMEs Are Against The Hikes In Steel Import Duty?
MSMEs are against the hikes in steel import duties. However, the main reason behind these hikes is the increasing Chinese steel imports. The imported steel is cheaper than the Indian steel. Thus, it raises concerns about the destruction of the Indian steel market in the long run. Indian steel is costlier than imported Chinese steel because of several additional costs like electricity duty, iron ore duty, and coal cess. However, China and other countries have different tax systems leading to cheaper steel. The government and large steel manufacturers are against it because it is damaging the Indian steel market.
Thus, there are discussions on increasing the import duty of steel. It also comes under the anti-dumping policies. It is a method through which the government increases the import duty on the products to avoid selling at cheaper prices than market value to protect the domestic market. MSMEs have another take on it. According to MSMEs, the big players only focus on their betterment and MSMEs are often ignored. It leaves a huge negative impact on MSME’s business because of increasing manufacturing costs.
According to them, the big players often don’t face much difficulty because of them buying in bulk. However, the MSMEs face difficulty because they don’t buy in bulk. They buy in lesser quantities that are not of much value to steel giants. Kumaraswamy asks the Finance Ministry to raise the import duty from 7.5% to 10-12%. Thus, it will bring huge changes in the lives of these MSME units that no one wants to address. The big players often export the products they manufacture. However, MSMEs claim that the big layers want to create a monopoly in the industry. Indian State Association organised an event recently in which Commerce and Industry Minister Piyush Goyal recently where he highlighted the issue. Stay tuned for more information on our website.