Still smarting from the implementation of the minimum import price (MIP), a section of downstream steel producers, who mainly belong to the medium, small and micro enterprises (MSME) segment, feel the policy could lead to a scenario of over-invoicing.
Speaking to ISMW on condition of anonymity, some downstream steel goods producers and exporters said that the whole policy of MIP could become infructuous for the MSME players, especially against the backdrop of a global price downtrend.
Elaborating, they said: “Because, if a certain steel product is available at say $300-350 per ton in the international market, the policy will force the importer to bring in the same at a much higher $425 per ton. This could lead to a situation of over-invoicing where the actual deals are struck at much lower rates,” informed a source.
It is mainly downstream producers or those who value-add that need to import large chunks of various steel products.
They also confided that players in Europe are already looking askance at India’s stance. “At a time when globally steel prices are, perhaps, at their lowest in so many years, we talk of increased prices. Because, when globally prices came down, our selling (exporting) prices got adjusted to the lower prices. Now, when we want to increase prices because our raw material rates have gone up, they look surprised and say, ‘How can the Indian players seek a price increase in a global scenario, where all prices are falling?’”
It may be recalled that around 60% of engineering exports are from the MSME space.