Ludhiana Industry Being Punished With Abnormally High Steel Prices As Compared To Whole Of India
Sep12,2026
| Gautam Jalandhari | Ludhiana
WORLD MSME FORUM
DEMANDS IMMEDIATE GOVERNMENT ACTION
Ludhiana, 11 September 2026: Ludhiana’s steel-consuming industries are facing a
sharp squeeze as local steel rates have shot up far above other major steel hubs.
Recent market reports show Ludhiana secondary-steel (mild-steel ingot) hovering
around ₹49500 today whereas a month back the steel ingot price was 44500 rs per
ton. So there is a sharp increase of around 5000 Rs per ton in a month which
comes around 12% per tonne,
The other major issue with the Industry of Ludhiana is that as on today the Steel Ingot
price in Ludhiana is 49500 Rs per ton whereas the steel ingot price in India is
very low as compared to Ludhiana .
In major steel cities such as Raipur and Durgapur, the price of steel ingot as on
today is 43000, in Kolkata it is 43900, In Jammu it is 46500, in Mumbai it is 46000,
in Raurkela it is 41800 and in Mumbai it is 46000 Rs per ton.
The situation becomes even more disturbing when Ludhiana is compared with Mandi
Gobindgarh, one of Punjab's most important steel markets. According to industry
price comparisons, approximately one year ago steel in Mandi Gobindgarh was only
around ₹200 to ₹500 per tonne costlier than Ludhiana. Today, the difference has
reportedly increased to around ₹2500 per tonne, meaning that even a major steel
market within Punjab is now significantly cheaper than Ludhiana.
So in a way Ludhiana is 2500 Rs per ton to 7000 Rs per ton costlier than other parts
of the country. The Ludhiana steel making industry use same scrap (imported and
domestic) which is being used by other parts of the country. Than why steel is 5% to
15% costlier in Ludhiana as compared to other parts of the country.
LUDHIANA'S MANUFACTURING INDUSTRY IS PAYING THE PRICE
The Forum said that the consequences of expensive steel are not restricted to steel
traders. Punjab's entire downstream manufacturing ecosystem is being affected
because steel is one of the principal raw materials used by Ludhiana's industrial
sector.
Ludhiana is internationally known for its bicycle and bicycle-component industry and
is also a major centre for automobile components, hand tools, agricultural implements,
machine tools, sewing machines, fasteners, engineering goods, wire products and
numerous other manufactured products. For these industries, even a relatively small
increase in the cost of steel can have a major impact on the final cost of production.
A difference of ₹7,000 per tonne may appear insignificant when viewed against the
value of a finished industrial product, but for a manufacturer consuming hundreds or
thousands of tonnes of steel, it becomes a massive additional production cost. The
manufacturer is then forced either to absorb the loss, increase the selling price or lose
the order to a competitor located in another part of the country.
The Forum said that this situation is particularly dangerous at a time when Ludhiana's
MSMEs are already competing with manufacturers from other Indian states as well as
international suppliers.
it is about whether the price-discovery and distribution system is functioning fairly.
“WHO IS ACTUALLY DECIDING THE PRICE OF STEEL?”
The World MSME Forum has particularly questioned the role of the informal network
commonly referred to in industry circles as the “SMS Mafia.” The Forum said that
daily steel prices are circulated through SMS, WhatsApp and other communication
channels and that these rates are subsequently treated by market participants as the
prevailing price of steel.
The Forum stressed that it is not alleging that every person or organisation circulating
market prices is involved in wrongdoing. However, it is demanding an investigation
into whether an informal price-quoting network has acquired disproportionate influence
over the steel market and whether traders and manufacturers are effectively being
forced to accept privately circulated prices as the market rate.
The Forum said that the Government should find out who prepares these daily rates,
what actual transactions are used to calculate them, who provides the underlying
information, whether large market participants influence the quotations and whether
there is any coordinated movement of prices across different markets.
“If these are merely genuine market quotations, there should be no difficulty in
explaining how they are calculated. But if an informal network is capable of
determining the price at which thousands of tonnes of steel are bought and sold
every day, the Government must investigate who controls that network and
whether the system is being misused,” the Forum said.
PUBLIC-SECTOR STEEL SUPPLY TO PUNJAB ALSO NEEDS A COMPLETE
AUDIT
The World MSME Forum has also questioned whether changes in the supply and
distribution of steel from public-sector steel producers have contributed to the
availability problem faced by Ludhiana manufacturers.
The Forum said that the Government must examine whether genuine MSME
consumers are receiving adequate quantities of steel directly or through transparent
distribution channels. If public-sector steel is not reaching genuine industrial
consumers in sufficient quantities, the Government must determine where the material
is going and at what stage additional margins are being added.
The Forum demanded that the Union Government examine the quantity of steel
produced by public-sector plants, the quantity allocated to Punjab, the quantity actually
supplied to Punjab and the quantity ultimately reaching manufacturing units in
Ludhiana and other industrial centres.
“Public-sector steel was created to strengthen India's industrial base. It cannot
be acceptable if a genuine MSME manufacturer is unable to obtain the required
grade directly or through a transparent channel while the same material is
subsequently available in the market at a substantial premium,” the Forum said.
The Forum has also called for an investigation into complaints regarding shortages
and abnormal premiums in particular steel grades used by automobile-component
manufacturers and other engineering industries. If there is genuine shortage, the
Government must identify the reason. If there is adequate production but material is
unavailable to manufacturers, the distribution chain must be investigated.
GOVERNMENT MUST INVESTIGATE BLACK MARKETING AND ARTIFICIAL
SCARCITY
The Forum said that allegations of black marketing, hoarding and artificial shortage of
certain steel categories cannot be ignored when downstream manufacturers are being
forced to pay substantially higher prices.
The Government should examine actual stock positions at steel plants, distributors,
stockists and major traders and compare those stocks with the quantities being
reported as available to MSMEs.
“If steel is genuinely short, tell the industry why it is short. If steel is not short,
tell the industry where it is being held. The Government must not allow an
artificial shortage to be created at the cost of thousands of manufacturing
units,” the Forum said.
The Forum further demanded that transaction-level data be examined so that the
Government can establish the actual movement of prices rather than relying solely on
quoted market rates.
STEEL PRICE MONITORING MECHANISM NEEDED
The World MSME Forum has demanded the creation of a transparent national steel
price-monitoring mechanism through which manufacturers can access reliable
information about ex-plant prices, freight, distributor margins and prevailing
transaction prices in major steel markets.
The Forum said that the objective should not be to impose an artificial price on steel
or interfere unnecessarily with legitimate market forces. The objective should be to
ensure that the price-discovery mechanism remains transparent and competitive.
“The steel market should be controlled by genuine demand and supply, not by
an opaque system of privately circulated quotations. If the Government believes
the present prices are justified, it should publish the underlying economics. If
they are not justified, it should identify the reason for the abnormal premium,”
the Forum said.
STEEL SHOULD BE BROUGHT UNDER EFFECTIVE ANTI-HOARDING AND
ESSENTIAL-COMMODITY CONTROLS
The World MSME Forum has also urged the Government to examine whether
appropriate categories of steel should be brought within the framework of the
Essential Commodities Act or another effective statutory mechanism that allows
the authorities to act against hoarding, artificial scarcity and market manipulation.
The Forum clarified that it is not demanding blanket price control over the steel
industry. Its demand is for an effective legal mechanism through which the
Government can intervene when essential industrial raw materials are deliberately
withheld, hoarded or subjected to abnormal market manipulation.
BIS REQUIREMENTS MUST NOT BECOME A BARRIER TO IMPORTS
The Forum has also called for an urgent review of mandatory BIS requirements
applicable to different categories and grades of steel.
The Forum said that BIS standards are important for quality and safety and should not
be removed indiscriminately. However, where a particular grade or specialised steel
is not adequately available from Indian producers, manufacturers must be given a
practical mechanism to import the material.
“Quality standards cannot be allowed to become a protection mechanism for
shortage. If the required steel is not available domestically, an MSME must have
the ability to import it through a fast and transparent compliance mechanism,”
the Forum said.
The Government should therefore consider targeted exemptions, faster certification
procedures or alternative conformity mechanisms for genuine industrial users where
domestic supply is insufficient.
The Forum said that competition from imports can also act as a natural check on
abnormal domestic premiums. If manufacturers have no alternative source of supply,
the bargaining power of the downstream industry becomes severely restricted.
LUDHIANA SHOULD NOT BE MADE TO PAY FOR THE INEFFICIENCY OF THE
STEEL MARKET
The World MSME Forum said that the issue has gone beyond the question of steel
prices and has become a question of the future of Punjab's manufacturing sector.
A bicycle manufacturer, an automobile-component manufacturer, a hand-tool
manufacturer, an agricultural-implement manufacturer or a machine-tool manufacturer
cannot simply increase prices every time steel becomes more expensive. Their
products compete in highly price-sensitive markets where buyers can shift orders to
another supplier.
Therefore, an additional steel cost of several thousand rupees per tonne can ultimately
result in loss of orders, reduction in production, lower employment and, eventually,
shifting of manufacturing activity away from Ludhiana.
“The Government must understand one simple fact: expensive steel does not
only hurt steel-consuming industries; it destroys the competitiveness of the
entire downstream manufacturing chain,” the Forum said.
WORLD MSME FORUM DEMANDS IMMEDIATE ACTION
The World MSME Forum has called upon the Union Government and Punjab
Government to immediately investigate the widening steel price differential between
Ludhiana and other major steel markets, particularly Raipur, Durgapur and Mandi
Gobindgarh.
The Forum has demanded a detailed investigation into the informal daily steel price
quotation system, including the role of the network popularly described as the “SMS
Mafia,” and has called for verification of whether such price quotations are based upon
genuine transactions or are capable of influencing and manipulating market prices.
The Forum has further demanded an investigation into the supply of steel from public-
sector plants to Punjab, the availability of critical grades required by MSMEs, the
possibility of artificial shortages and black marketing, and the margins being charged
between the steel producer and the final industrial consumer.
It has also urged the Government to review BIS requirements affecting steel imports,
particularly where domestic production is inadequate, and to create a fast-track
mechanism through which genuine manufacturers can import required steel without
unnecessary procedural delays.
The Forum said that appropriate steel categories should also be considered for
effective anti-hoarding and essential-commodity controls so that the Government has
the power to act whenever artificial scarcity or manipulation is established.
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