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The Union Government has categorically stated that though it is willing to provide protection to the domestic pipe manufacturers against unfair trade practices, the industry must also act responsibly, a top Steel Ministry official said at an ASSOCHAM event held in New Delhi today.
“While we are willing to give protection, it comes with a sense of responsibility so please be very-very responsible, charges of cartelisation then become very-very difficult to fend off as prices start rising dramatically,” said Syedain Abbasi, joint secretary, Ministry of Steel while addressing an ASSOCHAM summit on ‘India Pipeline: Opportunities in infrastructure, energy, water & slurry.’
Stating that it is not in government’s interest to buy steel at prices which are very-very high, Abbasi said, “Then if people gather and say that look these controls have to go then ultimately it will be the pipe industry which will be the loser.”
He urged the pipe industry to look at it very hard and very carefully. “We want to provide you the protection so that you can survive, beyond that if you want to do then you will have to compete in the open market without any protections.”
Noting how efforts have been renewed after the new US president took over to limit the import of steel and steel products to a significant extent in to the US, Abbasi said, “In such a situation, when stronger economies in the world are looking at protecting their industry, we have to be very clear that our domestic markets also require to be protected against unfair trade practices. That is something, at least in the steel industry, we are very clear about.”
He said that after the policy on Domestically Manufactured Iron & Steel Products (DMI&SP) had come there were concerns expressed by organisations like GAIL, IOC as well as the Petroleum Ministry about a significant hike in prices.
“My request would be that while we are willing to provide protection, it would become very-very untenable to us to continue if you suddenly find that the prices in the next tender for GAIL pipeline have gone up by 30 per cent,” said Abbasi.
Terming the impact of goods and services tax (GST) on steel industry, ‘marginally beneficial,’ he said that in raw material - duty will come down by 1-1.5 per cent.
“Even in steel products while it is 18 per cent but a lot of double taxation has been moved out then again there will be an impact of 1-1.15 per cent,” said Abbasi.
On resolution of non-performing assets (NPAs) in steel sector, he said that it depends not only on GST and DMI&SP but also on pickup in steel demand, prices and other related factors.
Abbasi informed that after the intervention of Prime Minister's Office (PMO) the problems created by the railways in giving ‘way leave agreement,’ to cross the slurry pipeline either underground or over-head across railway land have abated.
“This is again a huge market for pipe manufacturers to exploit and I would request the pipe manufacturers to promote with ministries and state governments as in terms of transportation and logistics this is a far cheaper, environmentally safer and better option,” said Abbasi.
“This is something which needs to be promoted all across and pipe manufacturers would be doing themselves a disservice if they do not have a strong promotional arm to promote these issues,” he added.
The senior official said that Pipe industry in India has a great future as it has exported enormous quantities of pipes all over the world and the quality of manufacturing is well-known internationally. With renewed stress on infrastructure and Make in India, the best days of pipe industry are ahead.