Ludhiana: Industrialists against plan to impose 25% safeguard duty on steel import
If implemented, the move will harm 63.38 million MSME units across nation, say members of industrial bodies while calling for alternative measures, such as incentivising domestic steel production.
Punjab’s industrial sector has strongly opposed the steel ministry’s proposal to impose a 25% safeguard duty on steel imports, warning of devastating consequences for the economy, downstream industries and infrastructure projects. Leaders from various industrial bodies have criticised the policy, stating that it would disproportionately harm small and medium enterprises (SMEs and MSMEs).
Addressing a press conference here on Tuesday, industrialists stated the proposed duty is expected to lead to rising production costs for industries reliant on steel, such as construction, automotive and manufacturing. This will reduce their competitiveness in both domestic and international markets. Furthermore, restricting steel imports would stifle competition, enabling domestic steel manufacturers to increase prices unchecked, which could result in inefficiency and higher costs for end-users.
The industrialists also warned that India’s ambitious infrastructure projects could face significant delays and cost overruns due to the increased steel prices, slowing economic progress.
Upkar Singh Ahuja, president of the Chamber of Industrial and Commercial Undertakings (CICU), said that with manufacturing output already at an 11-month low, the safeguard duty is feared to further weaken GDP growth, which currently stands at 5.4%. Additionally, businesses could face closures due to the squeeze on margins, leading to increased unemployment and inflation.
Industry leaders, including SC Ralhan from FIEO, CICU general secretary Honey Sethi, UCPMA president Harsimar Singh Lucky, CICU vice president Gautam Malhotra, FMAI president Narinder Bhamra and others expressed that such a measure would harm India’s global competitiveness.
They argue that the policy contradicts the government’s ‘Make in India’ initiative, which seeks to position the country as a global manufacturing hub. Competitive steel pricing, they said, is crucial for attracting foreign investments and enabling Indian manufacturers to produce world-class goods. Moreover, the policy could provoke retaliatory measures from trading partners, further damaging India’s export potential.
Ralhan said that the recent financial data highlights the robust profitability of the steel sector, with margins ranging from ₹9,000 to ₹15,000 per tonne. Stakeholders believe that additional duties are unnecessary and could destabilise the market, adversely affecting domestic consumers and broader industry.
He added that the policy seems to favour six major steel producers while jeopardizing 63.38 million MSME units across the country. Industry leaders have called for alternative measures, such as incentivising domestic steel production, improving supply chain efficiencies and reducing input costs, to address the challenges faced by domestic steel manufacturers without burdening downstream industries.
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