Seamless Pipe Exports Seek Budget Boost with PLI and Duty Hike Demands

The Seamless Tube Manufacturers’ Association of India (STMAI) has put forward crucial demands to the government ahead of the Union Budget for Fiscal Year 2027. The association is urging the introduction of a production-linked incentive (PLI) scheme for at least 10% of their products' exports, a move they believe will significantly accelerate India's export growth in the sector.

Budgetary Demands

• Production-Linked Incentive (PLI): STMAI has requested a PLI scheme specifically for 10% of the value of their exported seamless products. This incentive is seen as a vital tool to make Indian exports more competitive globally.
• Customs Duty Increase: The association also recommended a substantial increase in the customs duty on imported seamless pipes. They propose raising it from the current 10% to 20% in the upcoming annual budget to provide better protection to the domestic industry.

Key Concerns and Industry Importance

• Curbing Illegal Imports: STMAI President Shiv Kumar Singhal highlighted the adverse impact of illegal imports on domestic manufacturers. He stressed the need for stringent measures to control the influx of such products that are undermining local producers.
• India's Growing Role: India is emerging as a significant global player in the seamless pipes and tubes segment. In 2023, the country exported 172,000 tonnes of seamless steel pipes, valued at USD 606 million. These products are critical for sectors like oil and gas, engineering, and infrastructure.
• Export Destinations: Major markets for Indian seamless steel pipes include the United States, Italy, Canada, Spain, and the United Arab Emirates.

Official Statements and Expectations

• STMAI President Shiv Kumar Singhal emphasized that these concerns were raised during a meeting with the steel ministry.
• There is an expressed hope that the government will address these critical issues and incorporate them into the forthcoming budget proposals.

Impact

• The potential introduction of a PLI scheme could significantly boost India's export revenue and market share in the global seamless pipe industry.
• An increased customs duty might lead to higher prices for imported pipes, thereby increasing demand for domestically manufactured products and potentially improving profitability for Indian companies.
• Effective measures against illegal imports could level the playing field for domestic manufacturers, encouraging investment and expansion.
• Impact Rating: 7/10

Difficult Terms Explained

• PLI (Production-Linked Incentive) Scheme: A government scheme that provides financial incentives to companies based on their increase in production or sales of specific products, aimed at boosting domestic manufacturing and exports.
• Customs Duty: A tax levied on goods imported into a country, often used to protect domestic industries and generate revenue.
• Seamless Pipes: Steel pipes manufactured without a welded seam, offering higher strength and reliability, commonly used in high-pressure applications.
• HS Code (Harmonized System Code): An internationally standardized system of names and numbers to classify traded products. HS code 7304 specifically refers to tubes and pipes of iron or steel, seamless, hot-rolled or extruded.