Machinery companies like L&T, Godrej seek PM Narendra Modi’s intervention to withdraw draft order on steel quality

KOLKATA: A leading body of plant and equipment manufacturers has sought Prime Minister Narendra Modi's intervention to withdraw a recent draft order proposing mandatory standards in making of stainless steel flat products.

The Process Plant and Machinery Association of India (PPMAI), which counts the likes of Larsen & Toubro, Godrej, Thermax and Praj Industries among its members, said in a letter that the draft quality control order will discourage investment in key manufacturing sectors as quality rules under the Bureau of Indian Standards (BIS) are not comprehensive and updated. There is also little demand for stainless steel meeting Indian standards, it said.

PPMAI said it has its reservations on the order, with India globalising its manufacturing base through establishment of regional value chains by entering into Free Trade Agreements with major industrial nations globally. The high cost of materials will make the value-added segment unviable to compete globally on price," VP Ramachandran, secretary-general of PPMAI, said in the letter. Excessive protection for basic and immediate goods sector can lead to withdrawal of manufacturing in high-value segments, the association said. "While India has already imposed higher import duties on steel this year, the rupee devaluation to around Rs 67 to a US dollar from Rs 46 earlier also serves as a cushion to domestic stainless steel manufacturers," the letter said.

The body has drawn Steel Minister Narendra Singh Tomar's attention on the issue. PPMAI urged the steel ministry to open a dialogue with domestic stainless steel makers to ascertain how much do they produce as per BIS and whether they also support this draft order. PPMAI has also urged the government to investigate if domestic producers are producing stainless steel for industrial sector as per Indian standards. "Present BIS standards need alignment with global standards. Our standards are old," Ramachandran added.

Larsen & Toubro Limited