Industry opposes safeguard duty on steel production

The industry in Punjab has opposed the recent proposal put forth by the Union Minister for Steel to impose a 25 per cent safeguard duty on steel imports in the country.

This measure, if implemented, will have severe repercussions on the broader economy, downstream industries, and the cost of essential infrastructure projects, claimed the industry.

Small and medium enterprises (SMEs and MSMEs), which form the backbone of the economy, will be disproportionately affected by this policy, the industry feels.

CICU president Upkar Singh along with other industrialists maintained that the imposition of a 25 per cent safeguard duty on steel imports will increase production costs.

They said that steel is a critical raw material for several industries, including construction, automotive and manufacturing.

Higher steel prices will directly increase the cost of production for these sectors, making them less competitive in both domestic and international markets.

Besides, restricting imports through high duties will reduce competition, allowing domestic steel manufacturers to increase prices without accountability.

This could lead to inefficiencies and higher costs for end-users. India’s ambitious infrastructure development plans could face significant delays and budget overruns due to increased steel costs, ultimately slowing economic progress.

The industry also pointed out that unemployment would increase sharply due to loss of business and inflation will increase due to high cost of products in the Indian market.

The proposal contradicts the government’s ‘Make in India’ initiative, which seeks to position the country as a global manufacturing hub. Competitive steel pricing is essential for attracting foreign investments and enabling Indian manufacturers to produce world-class goods.

Imposing such a high safeguard duty could invite retaliatory measures from trading partners and hinder India’s export potential, too.