Steel Sector's Safeguard Duty Sparks MSME Concerns

The Indian government has imposed a 12% safeguard duty on certain steel products, aiming to protect domestic producers from rising imports. Consequently, the steel industry agreed to supply metal to MSMEs at export parity rates to prevent small manufacturers from being burdened by higher prices.

The Indian government's decision to impose a 12% provisional safeguard duty on select steel products is stirring apprehensions in the market, especially among micro, small, and medium enterprises (MSMEs). The measure, aimed at shielding domestic producers from the increasing influx of imports, is seen as a double-edged sword.

A top official stated that despite the new duty, the steel industry has committed to providing MSMEs with metal at export parity prices, ensuring that smaller manufacturers are not overburdened by policy-influenced price hikes. This approach aims to balance the scales as MSMEs are vital to various engineering sectors that rely on steel products.

However, concerns persist. The recent imposition could elevate input costs for specialized steels, crucial for downstream industries, by 8-10%. Critics argue that these duties, alongside arbitrary Quality Control Orders, might jeopardize MSME competitiveness, prompting fears of monopolistic practices and potential shutdowns.

(With inputs from agencies.)