Check out our Part 1 here, While the foundry industry has been ravaged by demand, policy regulation and taxation issues for long, it is to be seen how it will it revive its fortune in the coming months, as the world is facing the ferocity of the second pandemic wave. Besides the spiralling effects of the pandemic, the foundry industry has also lost projects in the areas of auto and other consumers such as power, railways and manufacturing in recent times. Further, the rising input costs, especially in the auto sector, proved a headache for the foundry industry as it was unable to negotiate reasonably to commensurate with the hike.

Auto is a major customer of foundry products. Although the auto sector got a facelift by receiving government support through reduced excise duty, which, in fact, has been further extended, there has been no such respite for the foundry industry, which is the key to the growth of the auto sector Foundries in India.       

Apart from the mounting labour costs by almost 10-15% in foundries, the prices of sand have spiralled upward manifold times in the last year, let alone its availability, which is another issue. Sand contributes to 8-10 per cent of the manufacturing costs of the produced casting by the sand moulding process. Even earlier, foundries demanded investment-linked tax incentives for a limited time to push investments and funding in productive and green technology, and duty-free import of sector-specific machinery not manufactured in our country beyond certain numbers that will allow rapid acceleration on eco-friendly and recycling equipment.

With the foundry operations already under duress due to the recent lockdowns and travel restrictions, it will be interesting to see how this industry can beat the odds. It is also high time foundries invest in the upgradation of technology and processes with an eye on the diminishing profit margins.