Bearing the brunt of the escalating steel prices, the forging and auto component industry, which has registered a negative growth of up to 20%, is demanding parity with the international steel prices.

Expressing concern over the steep hike in the prices of Steel, Industrialists’ Association of Punjab accused the UPA government for its complete failure to control the situation and threatened that the later would have to face the stiff opposition from the industrial houses in the forthcoming parliamentary election. “We had a meeting with Prime Minister Manmohan Singh on March 18, but instead of giving heed to the serious issue of extra ordinary prices of steel, the Prime Minister preferred to adopt a laid back attitude and did not assure any remedial steps,” SC Ralhan, who was part of delegation which met the Prime Minister and owner of Sri Tools India Ltd of Ludhiana, said.

Jalandhar, which is one of the largest hubs for hand tools industry, contributes about 60-70% of the country’s total exports. The industry has appealed to the Central government to ban steel exports or levy export duty in line with China. The forging steel prices prevailing at Rs 44 per kg in India, as per March 2008 figures, are the highest as compared to Rs 42 per kg in Europe, Rs 36 per kg in the US and Rs 34 per kg in China. “This has been a major contributing factor to various auto companies shifting their manufacturing base to China,” informed Jagdish Singh, representative of Association of Indian Forging Industry (AIFI) & chairman and managing director of Guru Nanak Auto Enterprises at a conference in Jalandhar.

Steel (Billet and Bar) prices in India have shot up 33% in the last 3 months, crippling the industry mostly dependent on Indian steel for domestic sales and finished product exports. Steel is the key input in forgings at 60-70% of the input cost. Pig iron and steel scrap are the key input to castings.

He further told FE, “The worst affected industries are the cycle parts, hand tools and forging industry. The export losses being suffered by the forging industry have mounted up to 20%. The hand tools industry has also registered a negative growth in exports, which stood at Rs 909 crore in 2006, and reduced to Rs 808 crore in 2007 and this year within the first four months they have further come down to Rs 725 crore. More than 75% of small scale industries have vanished leading to massive unemployment in our field.”

The industrialists also mooted that like Taiwan, Korea and Japan have already initiated ways to curb exports.