New Steel Safeguard Duty Sparks Industry Concerns

The Indian government's recent imposition of a 12% safeguard duty on certain steel imports may halt imports and push reliance on domestic suppliers. The Global Trade Research Initiative warns this could lead to increased prices and affect MSMEs negatively, as domestic steel doesn't meet all specialized demands.

The Indian government's decision to impose a 12% safeguard duty on five steel product categories could significantly disrupt steel imports and compel buyers to look toward domestic suppliers. This development is likely to result in price hikes, according to the Global Trade Research Initiative (GTRI).

GTRI noted that Indian production alone can't meet the demand for specialized steels like abrasion-resistant plates. While local mills have recently increased prices by 8-10%, the safeguard duty could further inflate input costs by a similar margin.

The duty arrangement, criticized for potentially being introduced without sufficient injury evidence, could force MSMEs out of business due to escalating input costs and restricted supply. While larger firms benefit from exemptions, smaller businesses face mounting competitive pressure, thus jeopardizing their survival.

(With inputs from agencies.)