CII suggests measures to revive growth of steel industry
Spread of COVID-19 has impacted the production, demand and supply of steel in the country
Industry body CII has suggested the government a slew of measures for reviving the growth of Indian steel industry, hit by COVID-19 pandemic. In a representation to the government, Confederation of Indian Industry (CII) has raised the various issues, the steel sector is facing, and recommended steps to be taken address these challenges.
Spread of COVID-19 has impacted the production, demand and supply of steel in the country. Many steel plants are running at lower capacity.
"With a slowdown of all economic activities due to the nation-wide lockdown amidst steep drop in margins, the steel industry is likely to face huge drop in sales along with stress on margins. The entities are burdened to service debts and will not be able to even execute business plans nor do any expansions. Some suggestion to revive the growth for the survival and sustainability of the steel industry is placed for consideration," CII said.
To enhance demand, the industry body suggested measures like time-bound implementation of infrastructure projects announced by the government and package for steel consuming industries like auto and infrastructure, besides a ban on imports of seconds, defectives and re-rollable scrap steel, which constitute hazard to Indian consumers.
On raw material security for steel makers, the body requested for zero import duty on essential raw materials for steel, like coking coal, coke, ferroalloys, zinc, and metallurgical limestone. It also asked for a ban on export of steel making raw materials.
To improve the supply chain disruption, CII suggested that port authorities should relax port charges till situation normalizes, waiver of container detention and ground rent charges at the ports for import and export activity, besides no restriction on inland movement of imported goods to avoid congestion at port and round the clock custom clearance.
It also recommended a dedicated freight corridor for steel and other bulk materials and completion of NW5 (national waterways 5) for facilitating steel and raw material movement.
Suggesting some financial measures, CII said that "interest payment on all loans including (non-convertible debentures) NCDs/CPs and working capital limits should get grace period of payment for at least 90 days from the respective due date for a period of 180 days. Defer payment of import duty, GST and income tax payable during the period of lockdown for 90 days payable thereafter in 6 monthly installments. This will assist steel Industries to manage its cash flow".
The industry body is seeking infrastructure status for steel sector to access long term capital.