Steel Price Surge Puts MSMEs Under Pressure; CICU Seeks Temporary Waiver of Import Duty

Ludhiana, September 22, 2026: The sharp rise in steel prices has added another burden on Punjab’s manufacturing MSMEs, with the price of flat steel reportedly increasing by around ₹10 per kg in the last 20 days. At the same time, industries are facing difficulty in getting adequate material, raising concerns of another round of price increases in the coming weeks. The Chamber of Industrial & Commercial Undertakings (CICU) has urged the Central Government to temporarily waive or relax the safeguard duty on HR and CR coils and immediately review the prevailing steel price and supply situation.
The safeguard duty was introduced in April 2025 when the government imposed a 12% duty for 200 days on specified flat steel imports. The measure was subsequently continued with a three-year structure—12% in the first year, 11.5% in the second year and 11% in the third year. The objective was to protect domestic steel producers from cheaper imports. However, CICU said the situation has now become difficult for the large number of downstream MSMEs which depend on HR and CR steel as their basic raw material.
According to CICU’s assessment, international HR coil prices are presently around USD 530–550 per tonne, while domestic prices have crossed approximately USD 640 per tonne. Despite this significant price difference, manufacturers are also reporting that steel is not easily available in the domestic market. The price pressure is particularly affecting engineering, auto components, bicycle, fastener, fabrication, machinery, electrical and other steel-consuming industries. Higher raw-material costs are squeezing already-thin margins and making it increasingly difficult for MSMEs to remain competitive in domestic as well as export markets.
‘MSMEs cannot be made to pay the price for protecting one sector’
CICU President Upkar Singh Ahuja said the government’s decision to protect the domestic steel industry was understandable when imports were putting pressure on Indian producers, but the policy now needs to be reviewed in view of the difficulties being faced by downstream industries. “When the safeguard duty was introduced, the concern was cheaper imports and protection of the domestic steel industry. Today, the situation has become different. Our MSMEs are paying a much higher price for steel, and even after paying that price, they are struggling to get material. This is directly affecting their production, orders, employment and exports.” He added: “We are not against the domestic steel industry. Our concern is about maintaining a balance. If international HR coil prices are around USD 530–550 per tonne while Indian prices have crossed USD 640 per tonne, the government must examine why such a wide gap exists. MSMEs cannot continuously absorb ₹10–15 per kg increases in their raw-material cost.”
Mr. Ahuja urged the Ministry of Finance, Ministry of Steel and Ministry of Commerce & Industry to intervene urgently and consider a temporary waiver or substantial relaxation of the safeguard duty until steel prices and availability stabilise. CICU further urged the government to closely monitor domestic steel production, availability, pricing and supply practices so that the benefits of a strong domestic steel industry are not achieved at the cost of thousands of downstream MSMEs. “Indian MSMEs need competitive raw-material prices to compete with manufacturers globally. Protecting manufacturing employment and exports must remain at the centre of the policy,” Mr. Ahuja said.