India’s Ministry of Steel is considering a proposal to double the safeguard duty on steel imports from the current 12 per cent to 24 per cent. This move aims to protect domestic manufacturers from an influx of cheaper foreign steel, particularly from China, which could undermine local production and employment.
CRISIL Ratings anticipates that the proposed duty could lead to a 4–6 per cent increase in domestic steel prices in 2025. However, the agency notes that intense competition among mills may limit the extent of this price hike. The impact is expected to be more pronounced in the first half of the year, with prices stabilizing as domestic supply adjusts.
The construction equipment sector, particularly micro, small, and medium enterprises (MSMEs), may face challenges due to rising input costs. JCB India CEO Deepak Shetty highlighted that the safeguard duty has already led to an increase in spot market steel prices by ₹4–₹5 per kilogram, which could affect the affordability and competitiveness of construction equipment.
While the safeguard duty aims to shield domestic producers, it also raises concerns about potential inflationary pressures. A report by Union Bank of India suggests that rising metal prices could contribute to higher wholesale inflation in the coming months.
As the government evaluates the proposed duty, stakeholders across various sectors are closely monitoring its potential impact on prices, competition, and economic stability.
