The Process Plant and Machinery Association of India, which represents the Capital Goods and Process Equipment manufacturing industry, has urged the government to reduce import duty on steel to 7.5 per cent from 12.5 per cent to correct the inverted duty structure.

At present , the capital goods industry's key raw material steel attracts higher import duty while the finished capital goods products can be imported by paying a levy of 7.5 per cent.

In a letter to Prime Minister Narendra Modi the association has said there is an urgent need to reduce duty on certain grades of steel and stainless steel products not produced in the country and used in the manufacturing of capital goods.

VP Ramachandran, Secretary General, PPMAI said the main factors that inhibited growth of the Capital Goods manufacturing to its full potential is lack of high quality component manufacturing at competitive costs.

It is essential that high grade steel and stainless steel used by most small and medium component and equipment manufacturers are made available domestically at competitive price, he said in the letter to Prime Minister.

“There is a distinct threat to the domestic capital goods industry growth if it is not placed in a competitive environment due to high import duty on raw materials . The capital goods industry continues to remain dependent on foreign technology in key areas and imports of components and raw material which are critical given the specifications provided in the design and technology. The industry has strong potential as seen from the performance in past few years with its strong presence felt in the world market with substantial improvement in exports.” he said Ramachandran.

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