The Federation of Kutch Industries Association (FOKIA), which represents a diverse range of industries in Gujarat, has expressed its opposition to the proposed 25% safeguard duty on certain steel imports. In a recent letter to Union Finance Minister Nirmala Sitharaman, FOKIA highlighted that this duty could negatively impact all manufacturers of pipes.
According to FOKIA, hot rolled steel plates and coils of API grade are essential materials for producing submerged arc welded pipes, which are primarily used for transporting petroleum products. The Director General of Trade Remedies (DGTR) initiated an investigation into the safeguard duty on non-alloy and alloyed flat steel products on December 19, 2024.
Nimish Phadke, Managing Director of FOKIA, warned in his letter that imposing such a duty would adversely affect pipe manufacturers. He noted a concerning trend in the past: when restrictive trade measures are enacted, they often lead to significant price increases, which can hinder overall growth. The proposed 25% duty would raise the total customs duty on flat steel to 32.5%, while pipes currently incur a 10% duty. This discrepancy could lead to an inverted duty structure, making it more cost-effective for companies to import pipes rather than purchasing them domestically.
In its correspondence with the finance minister, FOKIA urged her to reconsider the imposition of the safeguard duty, arguing that such a move would stall infrastructure development. The organization also requested that if the duty were to be implemented, API grade hot rolled coils and plates should be exempted from it.
Phadke emphasized the importance of fostering growth and stability within India’s manufacturing sector by taking a comprehensive approach that considers the needs of all sectors—primary, secondary, and tertiary—rather than simply aligning with the interests of steel manufacturers in the primary sector.
