Priyanka Tiwari
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A section of India’s Micro, Small and Medium Enterprises (MSMEs) is preparing to petition the Central Government against the proposed 12% provisional safeguard duty on select steel imports.
An industry insider, speaking on condition of anonymity, said, "We will approach the government again and highlight how this move would create a cascading impact on raw materials, especially for exporters in the MSME sector."
Background: Safeguard Duty Recommendation by DGTR
On March 19, following months of investigation, the Directorate General of Trade Remedies (DGTR) recommended a 12% provisional safeguard duty for 200 days on specific steel products to counter rising imports. The recommendation, however, requires approval from the Finance Ministry before implementation.
While larger steel producers have advocated for such duties to protect against potential dumping—particularly in light of U.S. tariffs—MSMEs fear it would worsen input costs, which already account for 60% of their production expenses.
Implications for MSME Exporters
The source explained, “Domestic steel prices could rise by 8–10% if the duty is enforced, significantly impacting MSME exporters who are already facing difficulties due to global tariff challenges."
Indian MSMEs are currently dealing with the effects of higher U.S. tariffs on steel and aluminum, implemented on March 12. Pankaj Chadha, Chairman of EEPC India, had previously warned that $5 billion worth of exports—with $3 billion from iron and steel products—could be affected by these tariffs. Chadha also noted that nearly $1 billion in goods are already en route to the U.S. and now face higher import duties.
Balancing Interests: Industry Reactions
The Indian Steel Association (ISA), representing leading firms like Tata Steel and JSW Steel, has supported the duty and had originally lobbied for a 25% safeguard duty to prevent steel dumping from countries like China.
The DGTR settled on a more moderate 12% duty, aiming to balance the demands of large manufacturers and the concerns of MSMEs. Still, industry representatives argue that even the 12% figure is burdensome for smaller players.
“While 12% is less than the proposed 25%, the fact remains that MSMEs have not been adequately represented in this decision. The larger players have had their say,” a source said.
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