The forging industry in the country is facing a big challenge due to government policies and the global slowdown.

Drawing the government’s attention towards its anti-forging industry policies, the western unit of the Association of Indian Forging Industries (AIFI), has appealed to the government to reconsider the policies regarding high power tariff, high octroi duty, uncompetitive steel prices and unavailability of good quality iron ore.

Addressing mediapersons on Friday, AIFI spokesperson for western region, Asheet Pasricha said, “The government policies are not suitable for the forging industry in the state in the current scenario.’’

Pasricha, who is also the joint director of city-based Trinity Engineers Pvt Ltd, said, “We are observing a sign of a robust revival, as original equipment manufacturers are recording good results. But the four key issues of high power tariff, high octroi duty, uncompetitive steel prices and unavailability of good quality ore threaten our pricing and productivity levels versus other manufacturers across the country.”

Western Maharashtra is the hub of the forging industry, as it alone produces 60% of the total production in the region.

The annual production of the forging industry in the country is 1.5 million tonne.

Pasricha said recently Maharashtra State Electricity Distribution Company Ltd (MSEDCL) proposed a tariff hike for industrial consumers, which would put additional burden on them.

The official said the increase in Octroi in Pune would make the situation grim for the industry.

“The high octroi duty on all types of goods including furnace,oil,steel, industrial oil and lubricants,spares for equipments and other consumabels also increases the production cost,” he added.

Speaking about the competition from China, he said in China, there is no import duty on iron ore and the government gives incentives fir exporting finished goods, unlike in India.

He said even the ex-factory prices of steel in the international markets are 30% cheaper for local delivery than local prices.

The total imports of Forgings from all countries for 2008-09 is Rs2,395 crore including Rs 1,261 from China.

The damage to the industry due to the current policies framed by the government is going to make affect automotive, fabrication and other allied businesses of the forging industry.   

Published in DNA Dated 24-8-2009.