Chamber of Industrial & Commercial Undertakings Condemns India's 12% Provisional Safeguard Duty on Steel Flat Products

Ludhiana, March 19, 2025: The Chamber of Industrial & Commercial Undertakings (CICU) strongly condemns the recent decision by the Indian government to impose a 12% provisional safeguard duty on main steel flat products, including Hot Rolled Coils (HRC), Cold Rolled Coils (CRC), and Galvanized Plain (GP) products. This move is expected to have a significant adverse impact on the competitiveness of India's Micro, Small, and Medium Enterprises (MSMEs) in the global market.

The safeguard duty, with a cap of USD 675 per ton on HRC for the next 200 days, is set to be ratified by the Finance Ministry within 15 days. While the government aims to shield domestic steel producers from cheap imports, it risks pushing up steel prices, thereby undermining the competitive edge of Indian MSMEs, who rely heavily on affordable raw materials.

Upkar Singh Ahuja, President of CICU, emphasized, "The safeguard duty, if ratified, will adversely affect the already fragile position of Indian MSMEs in international markets. This decision will limit their ability to source competitively priced steel products, thereby increasing production costs and diminishing their ability to compete globally."

Every INR 1000 per ton change in flat product prices will negatively affect the EBITDA of major steel producers in India. Specifically, SAIL and JSW are expected to experience a 7-8% impact on their EBITDA for FY26, while Tata Steel and JSPL will see a 5% and 4% effect, respectively.

Ahuja further stated, "The rising costs of steel products will ultimately trickle down to MSMEs, further squeezing their margins and undermining their growth potential. We urge the government to reconsider this safeguard duty and seek a more balanced approach to protecting domestic industries without compromising the competitiveness of our MSME sector."

CICU calls upon the government to take into account the broader economic ramifications of this safeguard duty, particularly its potential to reduce India’s presence in international markets. Indian MSMEs, which play a crucial role in the nation’s manufacturing and export sectors, cannot afford to bear the brunt of such measures without compromising their viability on the global stage.