Rise in Steel prices make MSMEs fear of losing business

Micro, Small and Medium Enterprises are affected by sudden increase in Steel price, the Karnataka Small Scale Industries Association (KASSIA) has urged the government to subsidieS the steel prices or impose price control.

The price has risen by 35-40 % in the past 3 months, along with zinc and aluminium, which puts the MSMEs in precariousness when they are barely able to recover from the impact of the pandemic.

KASSIA said - ''The touted recovery is in fact seriously impaired by this sudden development,''.

The MSMEs in the state of Karnataka battling due to COVID 19 disruptions and now due to the rising steel prices put them into serious trouble, as Steel is the basic raw material for many micro and small enterprises in the manufacturing sector.

The association added –

‘'We, therefore, urge the government to intervene by subsidizing the prices or impose price control, in order to ensure prices are reigned in. This sudden spike in prices has made it impossible for MSMEs to meet confirmed orders and exports are in serious danger of loss of markets to competitors with long term negative consequences,''.

The government must take action to ensure steel is supplied at a competitive price to consuming small industries.

KASSIA further added that India also needs to encourage production of steel alloys as there is a dearth of supply of these.

''Also, in spite of being the second largest steel producer, our per capita steel consumption is dismally low at 72 kgs as against a world average of 225 kgs and China with per capita consumption of 590 kgs,'' KASSIA asserted.

Notably, a few days back Coimbatore District Small Scale Industries Association (CODISSIA) had written a letter to Shri. Dharmendra Pradhan, Minister for Petroleum and Natural Gas and Steel; Shri Nitin Gadkari, Minister for MSMEs; Ms. Nirmala Sitharaman, Minister of Finance and Corporate Affairs and Office of the Prime Minister expressing their concern about rising steel prices and stated

''The MSME industries will cease to exist, if necessary corrective action is not directed from the Ministry on the increasing prices of raw materials and other allied materials. MSMEs have already suffered due to the impact of COVID-19 and in addition, a blow to MSMEs like heavy increase in prices of raw materials due to which MSMEs are facing with cancellation of orders, uncertainty of consumption in the market and declining of exports etc.''.