Restrictions on steel availability hampering production in automobile industry
Automobile industry body SIAM Monday said vehicle manufacturers are staring at production stoppage if there is no resolution of the issues over restrictions imposed on domestic manufacturers using imported steel. Last month, the government had extended the deadline for automobile makers to use Bureau of Indian Standards (BIS) certified locally produced high-grade steel till February.
The automobile manufacturers had sought a year's time, expressing their inability to source high-grade steel locally soon citing inconsistent quality. "Yes, our production will get hampered if it is not resolved. We are making representation to the government regarding the matter," Society of Indian Automobile Manufacturers (SIAM) President Rajan Wadhera told reporters here. He further said nearly 90 per cent of the steel used in automobile production is manufactured in India and only around 10 per cent of high-grade steel, which is used for meeting safety standards among others, is not manufactured here.
"These are imported from abroad as there is no economy of scale to manufacture these in India. We are talking to the government to resolve the issue," Wadhera added. Moreover, he said there were issues with the quality and consistency of locally produced such high-grade steel. Auto industry sources said there were no incentives for the foreign steelmakers to get BIS certification as volumes are low in India. In June last year with an aim to promote local manufacturing, the steel ministry had mandated BIS certification for the commodity to be sold in India. This included both for domestically produced and imported steel. For the auto industry, December 17, 2018, was set as the deadline to meet the norm but has been extended till February 17 after automakers raised their concerns over the matter.
(With inputs from agencies.)