The government should explore putting iron and steel goods in the Remission of Duties and Taxes on Exported Products (RoDTEP) plan to make exports more competitive, as increasing costs of primary raw materials have harmed the sector, particularly MSMEs.
The Engineering Export Promotion Council of India (EEPC India) released a statement on Friday.
The export promotion committee also suggested a cut in customs tax on copper ores and concentrates from 2.5 percent to nil, ahead of finance minister Nirmala Sitharaman’s presentation of the Union Budget 2022-23.
“Manufacturers of steel and iron products are fighting to keep their firms buoyed up. Despite these price issues, they have been battling to stay afloat, as the bulk of sectors in this industry run on razor-thin margins and are in desperate need of government assistance. As a result, it is requested that the RoDTEP program’s advantages be extended to sectors that are equal to those covered by the MEIS scheme, “Chairman of the EEPC India, Mahesh Desai, stated.
For over a year, manufacturers-exporters have seen their profit margins erode due to rising raw material prices and an increase in ocean freight costs. “A higher duty rate drives the import of copper ores and concentrates through a preferred channel, but if the tax is cut to zero, Indian industry would be able to look for copper concentrate in places other than Chile and Indonesia and avoid significant market concentration,” Desai added.
Given the increased aims established for total exports and engineering items, the sector will need to invest in capital and grow capacity in the future. In November 2021, engineering accounted for 26.89 percent of overall merchandise exports, compared to 26.37 percent in October 2021, 26.65 percent in September 2021, and 27.68 percent in August 2021.
EEPC has recommended custom duty exemption for commodities used in the manufacture of refrigerator compressors, such as air or vacuum pumps, air or other gas compressors, and fans, among other indirect tax ideas.
The exemption can be revoked, according to the council, because it will assist in providing an incentive for domestic parts to be used in refrigerator compressors. The government should generate a revenue surplus due to the move.
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