Buyers must use price variation clauses to absorb impact of commodity price rise: Electrical ...

Ease of Doing Business for MSM Es: The prices of raw materials have jumped by 25 per cent to 90 per cent in the past one-and-a-half years, according to IEEMA. While Aluminium increased 85 per cent, Copper jumped 80 per cent and Steel grew 50-80 per cent in prices. Polymers also witnessed a rise by 50-90 per cent.

Ease of Doing Business for MSMEs: The abnormal and unprecedented price rise of all major raw materials, which are critical inputs in the manufacturing of electrical equipment, has made it almost impossible (for manufacturers many of which are MSMEs) to execute contracts that are with fixed price stipulation or have restrictions in price variation (PV) said industry body Indian Electrical & Electronics Manufacturers’ Association (IEEMA).

Hence, to mitigate the impact, the electrical industry representative body IEEMA has now called for incorporating price variation clauses (PVC) in all contracts consistently to safeguard the interests of both buyers and suppliers.

Read more at Financial Express