The ongoing boom in real estate and infrastructure was bound to spill over to the steel sector. Rating agency ICRA estimated demand for domestic steel to have grown at 10 per cent in FY25, but to moderate to 7-8 per cent in FY26 on the back of a slowdown in public capital expenditure.Homemade steelAbout two-thirds of India’s domestically produced steel is consumed by infrastructure and construction, and nearly a third for government projects, observes Shalabh Chaturvedi, Managing Director, CASE Construction Equipment, India & SAARC region. Real estate predominantly uses only domestic steel, making it a steady client for the industry.“We rely on high-quality Indian steel to meet construction requirements,” says D Kishore Reddy, Chairman and Managing Director, Mana Projects. “All our developments exclusively utilise Fe 550 grade thermo-mechanically treated (TMT) primary steel, conforming to IS 1786 standards and selected for its high tensile strength, ductility and consistent quality, from reputed and certified Indian steel manufacturers.”“We source Fe500 and Fe550 grades of steel per design specifications, domestically, in strict compliance to IS codes such as IS 800,” says Ajaz Ahmed, COO, Concorde.About 85-90 per cent of the components used in construction equipment are made of steel, according to the Indian Construction Equipment Manufacturers’ Association (ICEMA). Construction equipment manufacturers primarily use high-strength low-alloy steel, wear-resistant steel for buckets, blades and undercarriage components, and structural steel conforming to IS and equivalent global standards. CASE India’s lineup of backhoe loaders, compactors, crawler excavators, graders and dozers is built using high-tensile hot rolled sheet plates, with thicknesses ranging from 4 mm up to 40 mm, sourced entirely from leading Indian steel producers. According to Chaturvedi, “These high-grade materials are engineered to withstand extreme loads, high-impact applications and tough operating environments.”While Reddy believes India’s current steel production ecosystem meets both the qualitative and quantitative construction-grade steel needs of India’s developers, he relies on “long-standing partnerships with domestic steel producers and proactive planning to insulate Mana Projects from potential availability fluctuations”.Missing gradesUnabated growth in steel imports made India a net importer of steel in the past two consecutive years. Without protective measures, analysts expected a similar rise in the ongoing year.Analysts pointed out that global steel was being diverted to India because it is a high-growth country. But the fact is, several grades of steel aren’t locally available.Some construction companies and equipment manufacturers, which use a mix of internally and externally sourced steel, identified missing grades.Afcons uses long products in the form of TMT reinforcement bars, round bars, stainless steel bars, etc, and also structural steel in the form of mild steel angles, beams and channels, according to Dimitrius D’Mello, Director, Supply Chain Management, Afcons Infrastructure. “We also use other steel products like mild steel pipes, ductile iron pipes, mild steel plates and hot rolled coils in various grades; and high tensile strands for prestressing. Alongside this, Afcons imports specialised grades of sheet piles, grade S430 GP and some specific higher-grade stainless-steel material with alloys.” At Schwing Stetter India, some concrete processing, transporting and pumping machines are made of medium to high-strength carbon steel ranging from the E250 to the E350 and E550 grades, which are available in India, says VG Sakthikumar, Chairman & Managing Director, Schwing Stetter India, and Convenor of the Manufacturing and Supply Chain Panel, ICEMA. “However, the higher range of machines use high-yield, fine-grain structural steel including S690QL, S890QL and S960QL grades, UT-certified and conforming to the EN10025-6 standard. These grades of steel are not available with any Indian steel manufacturer and, hence, have to be imported primarily from Europe.”In the critical steel grades being imported by the construction equipment industry owing to local availability constraints, ICEMA lists ultra-high strength quenched and tempered steel, specialty wear plates/high-tensile/fine-grain structural steel plates including S690QL (2 mm to 6 mm thickness), S890QL, S960QL and S1100 QL grades, which are UT-certified and conform to the EN10025-6 standard – particularly those with a tensile strength ranging from 690 to 1,300 MPa. These grades are critical for meeting global performance standards.Tariff falloutTo protect the domestic industry from the surge of cheap imports, the Central Government slapped a 12 per cent safeguard duty on imports in April 2025 for 200 days, a move expected to have a mixed impact on industries using steel.With the additional safeguard duty of 12 per cent along with 10 per cent CESS in place, domestic steel players gained the opportunity to increase prices by nearly 8-10 per cent from Q1 onwards, notes Chaturvedi. “While this strengthens the domestic steel sector, it has also brought cost pressures for the construction equipment industry, which is already operating with thin margins and facing challenges in managing input material costs.”“While the intent of imposing tariff is often to protect domestic producers, it has complex and far-reaching effects on the manufacturing cost and supply chain of user industries such as the construction equipment sector,” notes Sakthikumar. “The non-availability of the required grades of steel in India and increased tariffs on import would make finished goods expensive and non-competitive in global markets, which would potentially affect their demand in the longer run.”“Recently imposed safeguard duties on steel import may slow down imports,” reckons D’Mello. “BIS approval, a client requirement, also impacts the time and cost of specialised steel imports. This may increase domestic steel prices and will impact the cash flow of contractors and slow down the delivery of material to projects.”Tariffs could lead to shortages of types of steel that aren’t available in the country, increasing the input costs for such steel, agrees Ahmed.“Tariffs on steel imports align with the Government’s Make in India vision, but could create short-term supply constraints and price volatility in the high-demand real estate and infrastructure sector,” according to Reddy. Increased material costs can potentially cause supply chain disruptions for OEMs, according to ICEMA, which could not only affect the margins of the user companies but also impact production schedules and erode the overall competitiveness of the construction equipment industry.Industry wishlistWhat would it take for the steel industry as well as users of steel to move towards a self-reliant India?Sakthikumar expects the Government to focus on facilitating the production of high-grade steel and developing technology by easing supply chain constraints for a range of steel products being used by industries like construction machinery, automotive, defence, etc. “Imports of steel products not manufactured in India but required as per a contract specification must be made easy through a single-window system,” says D’Mello. Further, “the Government must ensure that the imposition of tariffs does not in any way encourage cartels and restrictive trade practices that negatively affect consumers.”In other words, the industry calls for a balanced approach. While Reddy underscores the need to enhance domestic production capacity, incentivise steel R&D and ensure smooth logistics across the supply chain, Ahmed says encouraging domestic capacity expansion while allowing select imports, wherever necessary, would help maintain the growth momentum.Continue support for domestic producers, while investing in local capacity for specialty steels and ensuring steady, affordable supply for high-demand sectors like infrastructure and construction equipment, recommends Chaturvedi. “Sustained infrastructure investment, focusing on the local construction equipment industry, and policy continuity will be key to balancing rising demand with stable supply, enabling both producers and users to grow in tandem.”Additionally, the Government may consider a differentiated tariff structure, according to ICEMA. This approach would involve protecting domestic steel producers while providing duty concessions or exemptions for critical grades of steel not manufactured locally and used by the construction equipment industry, among others.Proposed quotes:We rely on high-quality Indian steel to meet construction requirements. - D Kishore Reddy, Chairman and Managing Director, Mana ProjectsAfcons imports specialised grades of sheet piles and some specific higher-grade stainless-steel material with alloys. - Dimitrius D’Mello, Director, Supply Chain Management, Afcons InfrastructureOur higher range of machines use high-yield, fine-grain structural steel not available with any Indian steel manufacturer. - VG Sakthikumar, Chairman & Managing Director, Schwing Stetter India, and Convenor of the Manufacturing and Supply Chain Panel, ICEMAThe additional safeguard duty and CESS have brought cost pressures for the construction equipment industry. - Shalabh Chaturvedi, Managing Director, CASE Construction Equipment, India & SAARC regionTariffs could lead to shortages of types of steel that aren’t available in the country. - Ajaz Ahmed, COO, Concorde