Responding to the imposition of the minimum import price (MIP), Indian engineering goods manufacturers have sought an International Price Reimbursement Scheme for export production, an official at India’s Engineering Export Promotion Council (EEPC) said on Tuesday, February 9.
Elaborating the scheme, the official said that to ensure supply of steel at competitive prices the government needs to reimburse the difference between the import price and the international price for all steel products that go into export production, in order to maintain the competitiveness of Indian products in the international markets.
At a time when global demand is weak, engineering product exporters will be unable to either absorb higher steel input costs or to avoid passing them on to overseas buyers, and so the compensatory mechanism is essential to maintain India’s market share, the EEPC official said.
In communications made to the government, the EEPC has also sought that safeguard duty on steel imports should be withdrawn as, according to the EEPC, continuation of both the safeguard and the MIP is akin to double taxation which would make engineering exports even more uncompetitive at a time when engineering product exports fell 15 percent year on year during April-December 2015, the official said.