New Delhi, April 9: Safeguard duties on a range of steel products to help domestic steel makers will hit the export prospects of the engineering sector, which is an end-user of this steel.

"This is a discriminatory judgment and does not take into account the impact the safeguard duty will have on global competitiveness of user industries," T.S. Bhasin, chairman of EEPC India, said.

The safeguard duty order said the extended duty will apply to hot-rolled flat products of non-alloy and other alloy steel in coils of 600mm width. It would start at 20 per cent, minus any existing anti-dumping duty, and be lowered gradually to 10 per cent by March 2018.

Officials said it would be 18 per cent after six months till March 2017, 15 per cent till September 2017, and 10 per cent from then till March 2018.

Engineering exports have suffered because of the global slowdown and the safeguard duties could further affect shipments from the country.

The share of engineering in India's total exports is around 20 per cent and primarily exports are of low and medium technology-intensive engineering goods.

The share of high-tech goods is less than 6 per cent of the overall engineering exports basket. The bulk of the engineering exports basket is accounted for by small and medium enterprises.

"There was no case for the continuation of a safeguard duty and that too till March 2018, when there are already indications that global prices of steel have started to increase," Basin said.

The safeguard duty not only makes engineering exports uncompetitive, but there is also no reason for the levy on HR coils, which is a basic raw material for engineering products, especially when a minimum import price has been fixed.

"Protection to one sector should not spell a death knell for the user industries, which are also battling the global slowdown and domestic demand compression," he said.

Among the top 25 importers of India's engineering exports during April-February 2015-16, only seven recorded a growth in imports from India. For the remaining 18 countries, India saw lower overseas shipment, according to export data.

The data indicated that the decline in engineering exports has been higher than that of the overall merchandise exports. However, the pace of decline in engineering exports decelerated in February compared with the previous two months.