Engineering export has been badly hit by rising input cost of iron and steel products and strengthening of the rupee against the dollar.
Casting and forging units in the eastern region said recently they had stopped taking orders from the US and west Asia fearing that they would not be able to deliver export consignments at a profit.
"We have not taken any fresh order in the month of August since we will not be able to compete in the international market. Export figures from the region would show a dip September onwards," R P Sehgal, chairman of Engineering Export Promotion Council, said.
The export of casting from this region was Rs 350 crore (Rs 3.50 billion) annually, with all-India exports at roughly Rs 700 crore (Rs 7 billion).
Sehgal pointed out a large chunk of this would be wiped out if the input cost was not checked. EEPC has sought intervention of state and central governments in this regard.
Exporters from the eastern region alleged they had to pay more than manufacturers in southern and western India.
"We are paying almost Rs 1,500 more per tonne since the market price has been kept artificially high," O P Agarwal, of R B Agarwalla & Co, said.
Foundry grade pig iron was being sold at Rs 12,000 per tonne in south while in the east the price was Rs 13,500/t. Casting units alleged pig iron producers had created an entry barrier for small units by stipulating assured high volume offtake from them.
"Since the bidding happens on volume, we are unable to compete with the traders' cartel. They have jacked up the price by creating artificial shortage here," Sehgal added.
Manufacturers said pig iron producers had gone in for two rounds of price increases in August alone, pushing up prices by Rs 800-1200 per tonne.
"We have lost the market in the Europe. China has cornered a sizable part of the market in west Asia. More importantly, the 'Buy American' phenomenon has squeezed opportunities in the US. In this scenario, increasing input cost has reduced the gap between us and US-based manufacturers," Sehgal said.
