FICO opposes proposal on safeguard duty on steel

Members of the Federation of Industrial & Commercial Organisation (FICO) have opposed the Steel Ministry’s proposal to impose a 25 per cent safeguard duty on steel imports. They said the move will harm the economy and negatively impact small businesses (MSMEs), making it harder for them to afford steel and stay competitive.

Gurmeet Singh Kular, president, FICO, said the proposed duty is expected to increase production costs for industries that depend on steel, especially the manufacturing sector. This could make them less competitive in global markets. Additionally, limiting steel imports would reduce competition, allowing domestic steel manufacturers to raise prices unfairly, leading to higher costs and inefficiency for consumers.

KK Seth, Chairman, FICO, said manufacturing output was already at an 11-month low and the safeguard duty is expected to weaken GDP growth, which is currently at 5.4%. It could also lead to business closures due to lower profits, causing higher unemployment and inflation.

Manjinder Singh Sachdeva, general secretary, FICO, said this imposition goes against the government’s ‘Make in India’ initiative, which aims to make India a global manufacturing hub. Competitive steel prices are important for attracting foreign investment and helping Indian manufacturers produce high-quality products. The members pointed out that the recent financial data shows the steel sector is highly profitable with big profit margins. Stakeholders believe that extra duties are unnecessary and could disrupt the market, harming domestic consumers and industries. The policy seems to benefit just six large steel producers while putting 63.38 million small businesses (MSMEs) at risk, said FICO members.

The FICO members also suggested alternative measures such as encouraging domestic steel production, improving supply chain efficiency and reducing input costs.