Exports of hand tools suffer due to hike in steel prices

SteelJalandhar, Feb 5: Due to steep rise in steel prices, the hand tools exporters of Jalandhar fears decline in export of their products.

Perturbed over the steep rise in prices of steel and iron, the members of the Hand Tool Exporters Forum (HTEF) has requested the Central Government to take immediate steps to give relief to the Industry. Punjab has been contributing more than 90 per cent to the total export of hand tools from India.

There are nearly 300 small and big export industries of hand tools, which employs around 70 thousand skilled workers directly, producing tools for about Rs. 85 billion. 90 per cent of the total production is exported to various countries of the world.

Justifying their fear about the decline in export, the convener of the HTEF, Jyoti Parkash told ANI that the future of the industry has become uncertain as the entire industry has gone into recession.

He added that the average growth in the last few years was nearly 20 per cent. However because of sharp increase in input costs of iron and steel, growth of the industry has become negative.

As per the available figures, in 2004-05 the industry exported hand tools worth 172.74 dollars as against 136.41 dollars in 2003- 04 that is about 26 per cent of growth.

In the financial year of 2005-06 industry saw a growth of 18 per cent by exporting hand tools worth 204.76 dollars. But during 2006-07 export was for 182.95 dollars, with a decline of minus 10.90 per cent against last year’s export.

Last year, the steel price was Rs 26,000 and pig iron was Rs 20,000 per metric ton (MT). It has increased to Rs 35,000 and Rs 26,000 per MT respectively.

Whereas there was no rise in steel prices in China, which is the main competitor of India in international market.

The prices have gone up by nearly 20 per cent and similarly increase of 10 per cent has taken place in steel items like flats and rounds said Parkash.

While Iron and steel forms 60 -65 per cent of the total cost of production of hand tools industry and with every 10 per cent increase in iron and steel prices it adds nearly six per cent to the cost of hand tools.

He fears that China will get the orders from international buyers, if India will not be able to provide products at a lesser price than china.

The exporters demanded that the export of the raw iron and steel, which have been growing rapidly, should be stopped immediately and Government should scrap 5 per cent import tax on scrap iron and steel to save the industry.

In the last budget, import custom duty on scrap was levied at 5 per cent.

Echoing with the resentment of the hand tool exporters, the Deputy Director Engineering Export Promotion Council (EEPC) Upinder Singh said that the steep price hike of iron and steel during the last one month has adversely affected the hand tool business.

He said that due to steep fluctuation in the price of raw material, the export has registered a negative trend. However he hoped this trend may not last long if required steps are to be taken by the government of India.

He said that most of the big industrial units have cut down on their labour and are running their units in one shift.

The exporters also expressed concern on upcoming international exhibition of hand tools in Cologne, Germany in March. They said that even the previous orders could not be completed due to steep hike in raw material. (ANI)

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