Forging industry seeks sops to face Chinese rivals

NEW DELHI: The Association of Indian Forging Industry (AIFI) on Sunday asked the government to provide a level playing field so that the sector can match its Chinese rivals both in domestic and international markets as it looks to post up to 25 per cent growth in the next fiscal.

Stating that price of the domestic steel, which accounts for 70 per cent of the raw materials cost of the industry , is up to 12 per cent higher than international prices due to taxes, AIFI said the government should create an environment where the domestic players can be competitive. "Steel that we buy here is 10-12 per cent higher than the international prices. Moreover, the Chinese enjoy export incentives from their government and makes it difficult for us to compete with them," AIFI Chairman of Finance and Administration Committee Asheet Pasricha said.

There has to be an environment where the domestic steel prices are brought to the level of the Chinese price and also incentives are provided on exports. There has also been an increase in imports of parts from China by automobile makers in the domestic market, he added.

On the export front, he said about 20-25 per cent of the total turnover is accounted by overseas sales, but “increased competition from Chinese manufacturers could impact exports of the industry."

The Rs13,200-crore forging industry has witnessed about 70% growth so far in this fiscal and the same is expected to continue in the last quarter, although it has been on low base of the previous fiscal.