Voicing concerns against the proposed 25 per cent safeguard duty on certain steel imports, the Federation of Kutch Industries Association (FOKIA) — an umbrella organisation of large, medium and small industries and associations in Gujarat — has written to Union finance minister Nirmala Sitharaman asking her to no impose the duty as it hurt all pipe manufacturers.

“Hot rolled steel plates and coils of API grade are major inputs for submerged arc welded pipes used for petroleum product transportation.

The DGTR (Director General of Trade Remedies) on December 19, 2024 initiated a safeguard duty investigation on non-alloy and alloyed flat steel products.

This safeguard is going to hurt all pipe manufacturers adversely,” stated Nimish Phadke, Managing Director of FOKIA in a letter addressed to the finance minister earlier this week.

“We have seen in the past when restrictive trade sanctions are imposed, there is an abnormal increase in prices and that slows down the entire growth path… The imposition of a 25 per cent safeguard duty on steel will take the total customs duties on flat steel to 32.5 per cent whereas the pipe attracts a custom duty of 10 per cent. This will create an inverted duty structure and the user may find it economical to import pipe rather than procuring it domestically,” Phadke added.

FOKIA in its letter has requested the finance minister to “not impose a safeguard duty” as the move will “put brakes on infra development.” The industry also stated, “ If at all it is imposed, exempt or exclude the API grade Hot Rolled Coils and Plate from such safeguard.”

Phadke stated that to promote the growth and stability of the manufacturing industry in India, it is important to take a holistic view incorporating all facets of the primary, secondary, and tertiary sectors, rather than going along with the submission of Indian steel manufacturers who constitute the primary sector.