Kolkata, Oct 1 (IANS): India's steel wire manufacturers, 80 percent of which are small to medium companies, fear that 30-40 percent of their capacity will be left under-utilised following the hike in steel imports' duty.

Besides Rs.500-700 crore expansion plans will be held up, industry body Steel Wire Manufacturers Association of India (SWMAI) said on Thursday.

According to the association, with the government hiking the import duty on steel rods and domestic steelmakers on the way to a price rise, input costs of small-scale steel wire makers will go up.

"Cost of steel inputs will sky rocket making the products of these units non-competitive," SWMAI chairman V. Vedmutha told media persons here.

The steel wire industry uses both domestic and imported steel wire rods as its raw material.

Out of the three million tonne of wire rods used, about half a million tonne are imported high carbon grade wire rods while the rest two and a half million tonne are procured domestically.

"However, there is a shortfall in domestic supply as well. Not only will our procurement prices rise but non-availability of raw materials will force the industry to under-utilise its capacity," said the association's past president Nirmal Saraf.

Vedmutha said the centre's decision to impose a 20 percent safeguard duty on select steel items will further accelerate input costs and hold organic expansion plans on hold.

As per the association, during the fiscal year ended March 2015, the industry imported wire rods valued at $250 million while in the current fiscal year, goods of the same category valued at $320 million is expected.