The continuous plunge in the value of Rupee compared to the US Dollar has made the industry people, particularly steel industrialists, a worried lot, as they rue that the situation might hit the industry hard under prevailing conditions and force them to reduce the import of raw material.
The steel industry, which is dependent on the import of steel scrap, has considerably decreased its import, which has ultimately affected the overall production.
Those in the industry feel that the depreciation in the value of rupee, which touched an all time low of Rs 64.45 per dollar on Wednesday, compared to the US Dollar has made it almost impossible for them to continue the import of steel scrap and majority of manufacturers have either stopped import or decreased it drastically.
President, All-India Induction Furnace Association, KK Garg, said that the furnace industry, which is completely dependent on the steel scrap imported from European countries for manufacturing has been affected badly due to the situation.
"Majority of the industrialists in Ludhiana as well as in Mandi Gobindgarh have either stopped the import of steel scrap or decreased it drastically. This has affected production in the industry, which has come down drastically," he said.
He said that the crisis might result in scarcity of iron bars required for construction purposes as the region is heavily dependent on steel industry here for iron bars used in construction.
He further alleged that the situation would, however, benefit big steel manufacturers, who will further strengthen their monopoly in the market.
On the other hand, Dev Gupta, general secretary, Induction Furnace Association of North India said that the new purchase of steel scrap has gone slow and that the industry was still waiting for the scrap they had booked earlier. He said that the situation would result in a crisis as manufacturers will not find raw material locally, which will hit the overall manufacturing.
President of North India chamber of exports, Subhash Bajaj termed the situation, arising out of depreciating value of rupee, as an alarming one for the industry.
He said that the situation will cause a big blow to the industry and both exporters as well as importers will be hit hard.
"Buyers abroad, particularly in the middle east, are viewing the situation in India. Even as the Rupee is touching a new low against dollar they continue to demand booking at cheap rates. The fluctuation in the value of Rupee is alarming as it will be the main reason behind loss to exporters," he said.