With surging prices of raw materials posing a major problems for MSMEs and other manufactruing units, it is imperative for the Government to takes measures to sustain these enterprises.
With a well-planned economic proposal for the budget for upcoming FY22, Engineering Export Promotion Council of India (EEPC India) chairman Mahesh Desai expressed his opinion on urging the government to include iron and steel products in the Remission of Duties and Taxes on Export Products (RoDTEP), so as to be able to combat surging prices of primary raw materials which have been a source of constant disruption for entities like MSMEs.
Speaking about the same, Mr. Desai also proposed a reduction on customs duty on copper ores and concentrates from 2.5% to nil as part of the recommendations for the upcoming budget FY22.
According to Desai, manufacturer exporters still continue to battle thin profit margins due to rising raw material prices and also in ocean freight cost for the last one year. With no support and government backing these exporters are finding it relatively hard to survive in an intensive market. He added to the point that by cutting down custom duties on copper ores it can be assured that sufficient availability of ores at competitive prices would further ensure reasonable prices of primary products in the local markets.
He also brought out the country’s dependence on importing copper concentrates due to limited copper ore reserves and that these imports are mostly procured from countries like Chile, Indonesia, enjoying 0% duty under the India-Chile PTA and India-ASEAN FTA respectively.
Given the higher targets set for overall exports along with engineering goods, it is imperative for the industry to make capital investment in time in order to be able to expand in terms of capacity. As on November 2021, the share of engineering in total merchandise exports was 26.89% as against 26.37% and 26.65% recorded in October 2021 and September 2021 respectively.
Mr. Desai has also suggested relaxation in custom duties for goods used in manufacturing refrigerator compressors such as air or vacuum pumps, gas compressors and fans, with an aim in incentivizing for usage of domestic parts in these compressors.
