Engineering exporters body EEPC on Saturday said imposition of minimum import price on certain steel products will have a "serious debilitating" impact on the sectors' exports which are already declining.
The introduction of Minimum Import Price (MIP) on steel products will raise the cost of raw materials for engineering products by about 6-10%, Engineering Export Promotion Council (EEPC) said in a statement.
The government's decision "will have a serious debilitating impact on engineering exports" which have already declined by 15% in the first nine months of the current fiscal, it added. The body asked the government to come out with a compensatory mechanism to make up for the increased raw material price. It said that the MIP would only protect the large steel manufacturers.
"Segments like auto and auto parts, industrial and electrical machinery, products of MSME sector, which in any case have low margins and are facing cut throat competition will face sudden escalation in raw material price, giving a further jolt to the exporters," it added.
The move would also have an inflationary impact on the entire manufacturing sector, it said, adding "the government must provide steel at global competitive prices." The government on Thursday imposed a minimum import price (MIP) on 173 steel products ranging between $341 to $752 per tonne.
Engineering exports declined by 15.68% in December to $5.82 billion in December 2015.
