The Federation of Industrial & Commercial Organisation (FICO) has raised strong objections to the Steel Ministry’s proposed 25% safeguard duty on steel imports, warning that the move could disrupt the economy and critically harm micro, small, and medium enterprises (MSMEs). FICO members argue that the policy would have far-reaching consequences, increasing production costs for industries dependent on steel and making Indian manufacturers less competitive globally.
FICO President Gurmeet Singh Kular highlighted the detrimental impact the safeguard duty could have on the manufacturing sector. With steel being a core input, higher costs would likely cascade across industries, making Indian products less competitive in international markets. The limited competition from imports could also empower domestic steel producers to inflate prices, burdening both businesses and consumers. FICO Chairman KK Seth further emphasised the timing of the proposal, noting that India’s manufacturing output is already at an 11-month low. The safeguard duty could exacerbate the situation, dragging down GDP growth, currently at 5.4%, and potentially forcing businesses to shut down, leading to higher unemployment and inflation.
Manjinder Singh Sachdeva, General Secretary of FICO, criticised the move as contradictory to the government’s ‘Make in India’ vision. He stressed that competitive steel prices are vital for attracting foreign investments and enabling Indian manufacturers to produce high-quality goods. The safeguard duty, he noted, would only benefit a handful of large steel producers at the expense of MSMEs, which comprise over 63 million businesses and form the backbone of the Indian economy. Instead of imposing the duty, FICO members proposed alternative strategies to strengthen the steel sector. These include incentivising domestic steel production, optimising supply chains, and lowering input costs. Such measures, they argued, would enhance the competitiveness of Indian steel producers without jeopardising smaller businesses or consumers. With the steel industry already reporting robust profitability, FICO members deem the additional duty unnecessary. They warn that the move could distort the market, creating inefficiencies and harming the broader economy.
