New Delhi, May 5 (KNN) The recently proposed 12 per cent safeguard duty on imports of non-alloy and alloy steel flat products by the Directorate General of Trade Remedies is expected to significantly affect MSME players in the construction equipment industry.
According to Deepak Shetty, CEO, JCB, spot market prices of steel are projected to increase by Rs 4 to Rs 5 per kilogram. “From the domestic market point of view the cost of the product will go up but it will hit the smaller players more because many of them source steel from the spot market,” Shetty explained.
The price increase resulting from the duty could also hamper exports at a particularly challenging time when US tariffs are already creating market uncertainty.
“JCB is exporting to more than 130 countries and when competing in the global market if you start losing cost advantage, it’s a challenge,” noted Shetty.
He emphasised, “Indian exports are currently reeling under the challenge of complete blockage of shipment through the Red Sea so shipments had to go through the Cape of Good Hope.”
He added, “Now, on top of that, the steel price going up.The ongoing Red Sea crisis has already increased logistics costs by 15 per cent and extended shipment times by approximately two weeks.”
The Indian Construction Equipment Manufacturers’ Association (ICEMA) has already appealed to the government to keep a very close eye to prevent profiteering in the spot market.
Despite these challenges, the construction equipment industry in India, including JCB, has substantially increased exports in recent years.
The sector’s transition to Stage 5 emission norms has opened new opportunities, enabling Indian companies to sell to major markets in Europe. It’s a great opportunity for Indian companies particularly as we are moving up the value chain from emission point of view to leverage our cost base.
India currently represents the third largest market for construction equipment globally.
(KNN Bureau)
