Coimbatore Industrial Associations Demand Urgent Steel Duty Relief
In a significant development, approximately 80 industrial and trade associations from Coimbatore have jointly appealed to the Union government to temporarily eliminate safeguard duty on steel imports. This urgent request aims to stabilize volatile steel prices and provide critical support to micro, small, and medium enterprises (MSMEs) that are grappling with escalating cost pressures and operational challenges.
Mounting Cost Burdens on MSMEs
The demand was formally presented during a comprehensive joint interaction organized by the Indian Chamber of Commerce and Industry and the Coimbatore District Small Industries Association on March 21. During this crucial meeting, stakeholders from diverse sectors including trade, industry, and services highlighted numerous pressing challenges threatening their survival.
Participants emphasized that the existing safeguard duty has directly contributed to rising domestic steel prices, exacerbating the financial strain on MSMEs already struggling with increased costs of essential raw materials. These include not only steel but also carbide and various engineering inputs that form the backbone of manufacturing processes.
With limited pricing power in intensely competitive markets, many industrial units find themselves unable to pass these additional costs to customers, creating unsustainable profit margins and threatening business continuity.
Critical Supply Shortages Worsen Production Woes
Beyond steel price concerns, industries are confronting acute shortages of several critical supplies:
- Commercial LPG cylinders essential for heating and processing
- Furnace oil required for industrial heating applications
- Petrochemical-based inputs including paints, red oxide, and turpentine
These materials are indispensable for fundamental industrial processes such as gas cutting, powder coating, and textile processing. Their scarcity has severely disrupted production schedules and output quality across multiple sectors.
Financial Stress and Policy Recommendations
Associations also highlighted severe liquidity challenges stemming from dual pressures:
- Rising input costs across all production categories
- Delayed receivables from clients and customers
To address this cash flow crisis, they have urged banking institutions to temporarily enhance working capital limits from approximately 25% to between 40% and 50% of turnover, providing essential breathing room for struggling enterprises.
With fuel shortages pushing industries toward greater electricity dependence, associations proposed several energy-related measures:
- Waiver of network and fixed charges for rooftop solar installations
- Deferment of scheduled tariff revisions
- Relief in GST compliance requirements
- Advancement of tax payment timelines to improve cash management
Participants unanimously emphasized that timely policy intervention is absolutely crucial to sustain MSME operations, protect existing employment, and ensure broader industrial stability in the region. The collective appeal represents one of the most comprehensive industry responses to the current economic challenges facing Coimbatore's manufacturing sector.
