Port Wings News Network:
EEPC India has placed before the Board of Trade, under the Commerce Ministry its concerns over high steel prices making the country’s engineering exports un-competitive in the international market with the result that shipments from the job-oriented sector are on a downslide.
Making a presentation before the BoT, chaired by the Commerce & Industry Minister, Mr Suresh Prabhu, the EEPC India Chairman Mr Ravi Sehgal said, ”The single biggest reason we are not able to export more is the higher domestic steel price making our products uncompetitive in global markets. It is ironical that the second largest steel maker in the world at 106 million tonnes finds it difficult to provide just 1%, i.e., One million tonnes to the MSME sector at international prices.”
The apex body of the engineering exporters has urged the Commerce and Industry Minister Mr Suresh Prabhu to ensure creation of a mechanism wherein at least the MSMEs get steel at international prices.”If not, the government should immediately appoint Steel regulator to tackle this situation”.
Mr Sehgal said there are reports of further restrictions on steel imports.” If the Government were to now impose Minimum Import Price on Steel products despite having Safeguard and AD duty, our engineering exports will be hit very badly”
Export shipments from India are carried by foreign shipping lines only. Since no competition exists, they keep on charging arbitrarily to the extent of Rs 2 – 3 extra per US$ on Ocean freight, making Indian product uncompetitive in the global market. Thus, a regulatory framework is needed as a watchdog in the interest of exporters.
The EEPC India presentation before the BoT also raised the issue of GST refunds. ” There are still past problems with regard to GST refunds pertaining to July- Sep 2017” Issues like the problem of Higher or Identical Duty Drawback taken during the transition period need to be resolved as it is blocking working capital.
It said China has increased the refund on value-added tax (VAT) on nearly 400 products without raising the actual tax. It is suggested that to counter this Chinese strategy, the MEIS rates on all engineering products should be raised by another 3%. “We need to do this quickly so that it is possible to reverse the declining trend in engineering exports in recent months”
The banking regulations for lending to SMEs are very stringent like higher rate of interest ranging from 8-14%, Collateral requirement etc. which offset profits and makes Indian exporters uncompetitive when compared with their counterparts.
Further, while the RBI Caution Listing gets postponed every 3 months, exporters face tremendous problems especially in case of SBI where bank merger has taken place and the exporter earlier had an account with one of the merged bank.
Most of the banks in India do not accept the export documents for Iran except few branches of UCO Bank. There should be a circular listing out the branches of UCO Bank in India which are accepting the document in INR and may be circulated to all the bank branches who are accepting the foreign exchange documents.