Indian Construction Equipment Industry Warns Against 12% Safeguard Duty on Steel Imports

Potential Threat to Infrastructure Momentum and Global Competitiveness

The Indian construction equipment (CE) industry has voiced serious concerns over the government’s proposed imposition of a 12% safeguard duty on steel imports. In a statement released by the Indian Construction Equipment Manufacturers Association (ICEMA), the industry warned that such a move could disrupt operations and hinder India’s infrastructure development.

Key Highlights of the Concern Raised

• USD 9.5 Billion Industry at Risk: The Indian CE industry, valued at approximately USD 9.5 billion, is the third-largest globally, after the US and China.
• Steel is Critical: High-strength, high-tensile steel, pipes, and tubes—mostly imported due to limited domestic availability—are vital for CE manufacturing.
• Price Surge Already Happening: ICEMA reports that market discussions have already triggered a steel price surge of INR 10,000 per tonne.
• Impact on Cost & Timelines: The safeguard duty, if implemented, could raise manufacturing costs, delay production timelines, and affect equipment deliveries.
• CEV Stage V Norms Already a Pressure Point: Manufacturers are already coping with increased costs due to new emission norms effective from January 1, 2025.
• Global Competitiveness at Stake: Higher costs may erode India’s export advantage, especially as global players look beyond China.

Sector-Specific Insights

According to ICEMA, the industry heavily depends on steel grades not manufactured in India. Any restriction on these imports could paralyze production lines, especially for equipment that relies on highly specialized components. With India striving to build smarter cities and expand national infrastructure, such a disruption could derail critical timelines.

Statements from ICEMA

In its statement, ICEMA emphasized, “The proposed safeguard duty poses a serious challenge to the growth trajectory of India’s CE sector. This could impact job creation, export potential, and timely project execution in the infrastructure space.”

ICEMA further added, “The recent introduction of the CEV Stage V norms has already increased the compliance burden. A rise in raw material costs at this stage will only aggravate the situation, affecting both manufacturers and project developers.”

Request for Balanced Policy Approach

ICEMA has urged the government to conduct a transparent and comprehensive review of the proposed safeguard duty. It recommends engaging with all key stakeholders before making any final decision, to ensure a policy that promotes domestic steel without destabilizing allied industries.

Outlook for the Construction Equipment Sector

The construction equipment industry plays a pivotal role in India’s infrastructural ambitions. As the government focuses on building expressways, metro systems, and urban projects, any disruption in equipment supply could ripple through the economy.

ICEMA concludes that a careful balance must be maintained to safeguard the interests of both steel producers and downstream sectors like construction equipment manufacturing. Ensuring such equilibrium is key to sustaining India’s growth momentum and enhancing its position in global markets.

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