Steel safeguard duty to hike infra costs, hurt MSMEs
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The safeguard duty imposed on steel products, including hot-rolled coils, sheets and plates, is likely to drive infrastructure and construction costs up by 8-10%, while impacting micro, small and medium enterprises (MSMEs) in industries such as automobile."The 12% safeguard duty will increase the cost of infrastructure and construction projects by 8-10% in the country," said Anil Bhardwaj, secretary general, Federation of Indian Micro and Small & Medium Enterprises. Secondary steel producers expect the safeguard duty to bring respite to their shrinking margins as "prices of secondary steel products like TMT bars used for construction will increase by 4-5%", said Anil Nachrani, convener, Secondary Steel Association of India. MSMEs using steel to make finished products, such as automobile and bicycle component makers, are poised to become less competitive in the overseas and domestic markets. Automobile and bicycle components can be imported into India without safeguard duty, costing less than those locally produced. "The Indian market is open for global exporters, allowing them to ship products such as auto components and bicycle parts to India without any safeguard duty, making the domestic producers of such components uncompetitive," said Bhardwaj.The safeguard duty is also a double blow for MSME engineering goods exporters, which were already reeling from the 25% tariffs imposed by the US on steel and aluminium imports last month."The steel prices have already gone up by 10% since the Directorate General of Trade Remedies recommended a 12% duty last month, which came after (US President Donald) Trump imposed a 25% tariff on steel and aluminium imports in March. This is a double blow for us, making it challenging to export," said Pankaj Chadha, chairman, Engineering Export Promotion Council.
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