India has been witnessing a high rate of inflation and continued increase in interest rates for a long time now. One of the most recent impacts was on the auto industry which has increased prices across the board. The forging industry today cited the continually rising industrial fuel prices and fluctuating steel prices as the key reasons for rising input prices and shrinking margins. Deven Doshi, President, Association of Indian Forging Industry, (AIFI) said, “The hike in the prices of industrial fuel is having a cascading effect on the entire industry. In fact the price of furnace oil has skyrocketed in the last few months. The price of furnace oil has increased to Rs 35.60, a whopping increase of 52 per cent over the last 6 months.” “It is not possible for the forging industry to absorb such a high increase in energy costs. The government should look at alternate subsidies or reduce taxes to bring down prices of industrial fuel products,” Doshi added. He also cautioned that the out-of-sync price escalations of fuel and forging quality steel could result in a drop in domestic demand as well as greatly reduced International orders. “The reported shrinkage of margins of the auto industry is a clear pointer towards this dreaded possibility,” he said. Doshi also reiterated the critical need to bring transparency in steel pricing by aligning to a weighted index of prices of essential inputs for steel making, such as iron ore, coking coal, melting scrap and ferro alloys, and energy costs. This will ensure that steel pricing in India is more cost-based rather than opportunistic.