The Indian construction equipment (CE) industry has voiced strong objections to the government’s recent imposition of a 12% safeguard duty on imported non-alloy and alloy steel flat products. The duty, intended to protect domestic steel producers, has drawn criticism from CE manufacturers who argue that the move could significantly disrupt their supply chains, raise input costs, and weaken India’s competitiveness in the global market.
Steel is the most critical raw material for the construction equipment industry, particularly high-tensile and performance-grade steel types that are largely unavailable from domestic sources in adequate volumes or technical specifications. As a result, the new safeguard duty is expected to strain manufacturing operations that depend heavily on these imports. Many industry stakeholders warn that production delays and increased costs are now likely across various infrastructure projects.
The Indian CE industry, currently valued at USD 9.5 billion and ranking third globally after the United States and China, plays an essential role in building national infrastructure. The announcement of the safeguard duty comes at a time when the sector is already absorbing the cost impact of the recently implemented CEV Stage V emission norms, which took effect on 1 January 2025. Together, these two policy changes have created a sharp rise in cost pressures, affecting financial stability across the sector.
Even before the formal announcement of the safeguard duty, the ongoing investigation had triggered speculation in the steel market, causing prices to climb by around INR 10,000 per tonne. The official imposition now compounds the situation, potentially leading to further increases in equipment pricing and, by extension, the cost of infrastructure development in India.
Industry experts also point out that this policy could hamper India’s prospects in the global CE export market. Indian manufacturers were gaining ground in international markets under the ‘China plus One’ sourcing strategy, but the rising costs and uncertain input availability could erode this momentum. There are growing concerns that these setbacks could dent India's aspirations to become a global hub for construction equipment manufacturing.
The CE industry has called on the government to urgently engage with key user industries before implementing such wide-ranging policy decisions. It seeks a re-evaluation of the safeguard duty’s long-term impact and has requested mitigation measures to support downstream sectors. Industry leaders stress the need for a balanced policy that protects domestic steelmakers without putting at risk the growth trajectory of critical industries like construction equipment manufacturing.