Government Budget Shocker? Indian Manufacturers Demand 20% Duty Hike & PLI to Crush Chinese Imports!

Budgetary Demands
The Seamless Tube Manufacturers’ Association of India (STMAI) has formally requested significant policy interventions from the Indian government ahead of the Union Budget. Their primary demands include the introduction of a Production-Linked Incentive (PLI) scheme that covers at least 10 per cent of the sector's exports. Additionally, STMAI is pushing for a substantial increase in the customs duty on imported seamless pipes, advocating for it to be raised from the current 10 per cent to 20 per cent.
The Threat of Illegal Imports
STMAI President Shiv Kumar Singhal highlighted the detrimental impact of illegal imports, especially from China, on domestic manufacturers. The association reports a stark increase, with seamless pipe imports from China more than doubling in FY25 to 4.97 lakh metric tonnes, compared to 2.44 lakh metric tonnes in the previous year. A key concern is that Chinese pipes are being sold in the Indian market at approximately Rs 70,000 per tonne, which is significantly lower than the established minimum import price of Rs 85,000 per tonne. This practice, known as dumping, severely undercuts domestic producers and leads to the under-utilisation of India's manufacturing capacity.
India's Growing Seamless Pipe Sector
Despite challenges, India is emerging as a notable player in the global seamless pipe market. In 2023, the country exported 172,000 tonnes of seamless steel pipes, valued at USD 606 million. These pipes are critical components for key sectors such as oil and gas, engineering, and infrastructure. Major export destinations include the United States, Italy, Canada, Spain, and the United Arab Emirates.
Impact
The proposed increase in customs duty and PLI scheme could significantly boost the competitiveness of Indian seamless pipe manufacturers.Domestic production capacity might see improved utilization, potentially leading to job creation and economic growth in the sector.Consumers and industries relying on seamless pipes might face increased prices in the short term due to higher import costs.The move aims to create a more level playing field against unfairly priced imports, fostering self-reliance in a critical industrial segment.
Difficult Terms Explained
Production-Linked Incentive (PLI) Scheme: A government scheme designed to encourage domestic production and exports by providing financial incentives based on incremental sales or production.
Customs Duty: A tax imposed on goods when they are imported into a country, intended to protect domestic industries and generate revenue.
Dumping: The practice of selling goods in a foreign market at a price below their cost of production or below their normal value, often to gain market share or eliminate competition.
HS Code: The Harmonized System code, an international nomenclature for the classification of products, used for customs purposes.