Due to lack of orders from the domestic industry the domestic pipe industry is facing severe under-utilization of capacity. The current capacity utilization has fallen below 35% and India has a total of six million tonnes of pipe making capacity. To stay afloat the companies are finding it difficult. Into the Indian market, Chinese companies are conveniently dumping pipes with the trade measures against dumping of steel, said by General Secretary of Indian Pipe Manufacturers’ Association, Vinod Mehta.
On import of hot rolled and cold rolled flat steel products India had recently levied a five-¬year anti-dumping duty which boosted the domestic steel industry. Due to cheap imports from China the pipe manufacturing industries are also facing problems and are looking for the government’s help.
Trade barriers that have been put up by countries like United States (USA), Iran, Saudi Arabia, Mexico, and Bolivia, the pipe manufacturing industries further are in trouble. These countries are working to protect their domestic industries which were in the export market for at least half of Indian pipe produce.
Further Vinod Mehta added that for these projects the domestic manufacturers are aspiring for some major relief even though the total requirement of pipes if far less than their combined production capacity With the government’s massive investments in infrastructure in the laying of pipelines.
In procuring The Indian government has recently brought change and to locally produce iron and steel products is giving preference. As per Mr Vinod Mehta, This is however not applicable to EPC (engineering procurement construction) contracts.
From domestic sources only to restrict the procurement of their requirement for pipes the oil and gas PSUs should be made to restrict. To incentives from the government; enjoy a lower cost of funds, lower logistic cost compared to the Indian counterparts, the Chinese suppliers are entitled. They outbid us on the back of export incentives that they get from their country,” as the price difference between Indian and foreign suppliers is not very big, said by Mr Mehta.
The rate difference is a massive 20% giving the Chinese product an edge between the Chinese pipe imports and local manufacturers.