Steel Import Duty Raises Concerns Among Construction Equipment Manufacturers

India's Construction Equipment (CE) industry has expressed significant concerns following the government's imposition of a 12% safeguard duty on imports of non-alloy and alloy steel flat products on April 23, 2025. The measure, intended to protect domestic steel producers, is expected to disrupt supply chains and increase costs for CE manufacturers who rely heavily on imported specialized steel not sufficiently produced in India.

The Indian CE industry, valued at approximately USD 9.5 billion and ranking third globally after the United States and China, depends critically on steel as its primary raw material. Many manufacturers require specialized high-tensile and performance-grade steels that are not produced domestically in sufficient volumes or specifications.

Price volatility has already affected the industry, with steel costs rising by approximately INR 10,000 per tonne during the safeguard investigation period. This price increase has compressed profit margins before the official duty implementation.

The timing of this duty coincides with the industry's recent compliance with CEV Stage V emission norms, implemented on January 1, 2025, which had already placed significant cost pressures on manufacturers.

Industry leaders worry the duty could undermine India's export competitiveness in global markets, particularly as international buyers explore alternatives to China under 'China plus One' strategies.

"We strongly appeal to the government to engage with key user industries in broader consultations while introducing such far-reaching measures," said a senior industry leader. "Without access to cost-effective and technically appropriate raw materials, the health of our industry—and India's infrastructure pipeline—stands at serious risk."

The CE industry has called for immediate government engagement and reassessment of the duty's long-term implications, advocating for balanced policies that support both domestic steel producers and downstream manufacturing sectors.