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Proposed safeguard duty on steel imports concern for Indian CE sector: ICEMA
Industry News- Apr 22,25
The imposition of additional duties would exacerbate these challenges and could have a cascading impact on infrastructure development, which is crucial to India’s economic momentum. Furthermore, it risks undermining the CE industry’s export potential at a time when global markets are exploring ‘China plus One’ strategies to diversify their supply chains.
The Indian Construction Equipment (CE) industry, currently valued at around $9.5 billion, stands as the third-largest in the world, following only the United States and China. The sector plays a pivotal role in enabling infrastructure development across the country by supplying advanced, high-performance machinery required for building roads, bridges, railways, and urban infrastructure efficiently and cost-effectively.
Steel is a critical raw material in the manufacture of construction equipment, forming the backbone of heavy-duty machines used across multiple sectors. Various grades of steel, including specialised high-strength and high-tensile steel, as well as pipes and tubes, are essential for the structural and functional components of construction equipment. Notably, many of these high-spec materials are currently not manufactured domestically and are required to be imported to meet production needs.
In this context, the ongoing discussion regarding the imposition of a 12% safeguard duty on imports of non-alloy and alloy steel flat products by the Directorate General of Trade Remedies (DGTR) has raised serious concerns within the CE industry. A sudden restriction on imports could severely affect downstream industries such as construction equipment manufacturing by limiting access to critical raw materials, particularly where domestic production does not meet the required technical specifications or volumes. Any disruption in the availability or affordability of these materials will directly impact manufacturing timelines and equipment delivery, and slow infrastructure execution across the country.
Moreover, the mere initiation of the safeguard duty discussion has already caused market disruptions. Steel prices have reportedly increased sharply—by approximately Rs 10,000 per tonne—since the beginning of the inquiry process. This has led to a rise in input costs for construction equipment manufacturers, squeezing already thin margins and creating uncertainty across the supply chain.
If the safeguard duty is implemented, it will further escalate steel prices, forcing equipment manufacturers to pass on the increased costs to consumers. This comes at a time when the industry is already facing heightened cost pressures due to the implementation of the CEV Stage V emission norms, which came into effect on January 1, 2025. The cost impact of compliance with these norms has already been transferred, at least partially, to end-users.
The imposition of additional duties would exacerbate these challenges and could have a cascading impact on infrastructure development, which is crucial to India’s economic momentum. Furthermore, it risks undermining the CE industry’s export potential at a time when global markets are exploring ‘China plus One’ strategies to diversify their supply chains. Indian manufacturers stand well-positioned to capitalise on this shift, but rising input costs could impair competitiveness and erode the country's export edge.
Given these far-reaching implications, the CE industry strongly urges the government to undertake a thorough and transparent assessment of the necessity and impact of the proposed safeguard duty. Any policy intervention must strike a careful balance between supporting domestic steel production and preserving the health of downstream industries critical to nation-building.
In this regard, the government must engage in broader consultations with key user industries such as construction equipment manufacturing, which form the backbone of infrastructure development. Only through an inclusive, data-backed approach can a sustainable and forward-looking solution be crafted—one that fosters both industrial growth and long-term economic progress.
The CE industry remains committed to working closely with policymakers to ensure that any decision made promotes India’s domestic capabilities while safeguarding the interests of industries vital to the country’s development trajectory.
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