Impact of Current Trade Policies on the Welding Industry in the Long Run

India’s welding industry faces a pivotal moment as trade policies shape its future. While tariffs and localisation initiatives aim for self-reliance, balancing them with access to advanced technology and global competition is crucial. Strategic FTAs, FDI, and MSME support are key to achieving global leadership in quality and innovation.

The welding industry in India is a vital part of sectors such as infrastructure, shipbuilding, automotive, oil & gas, defence, and heavy engineering. With initiatives such as Make in India, PM Gati Shakti Yojana, and the National Infrastructure Pipeline, there is increased demand for welding equipment, consumables, and automation.

Nevertheless, India’s trade policies—tariffs, import regulations, free trade agreements (FTAs), and localisation initiatives—are reshaping the welding ecosystem. In the long term, these policies will determine whether India becomes self-reliant and globally competitive or continues to rely on imports.

Tariffs and Import Dependency

India imports high-value welding machines, robotic arms, inverter-based systems, and specialty consumables. Basic customs duties (7.5–15%) and anti-dumping duties help protect domestic manufacturers from low-priced imports, particularly from China.

Long-Term Considerations

Positive

• Reinforces local manufacturing and production.
• Aligns with the Make in India initiative.

Negative

• Rising input costs for users due to increased prices of imported goods, especially in infrastructure and automotive sectors.

Tariffs may benefit domestic players, but excessive protection without sufficient investment in research and development could limit access to advanced global technologies.

Free Trade Agreements (FTAs)

India has signed FTAs with ASEAN, Japan, and South Korea, and is currently negotiating further agreements with the European Union and the United Kingdom.

These agreements allow welding products to be imported at lower duties, benefiting end users.

Implications

Pros

• Lower costs
• Better access to advanced technologies

Cons

• Increased competition for Indian manufacturers

To achieve long-term benefits, India must ensure reciprocal access for exports and enforce strict rules of origin to prevent misuse by non-member countries.

Localisation Push and Incentive Schemes

Government initiatives such as Production Linked Incentive (PLI) schemes and preferential public procurement policies promote domestic manufacturing. The Atmanirbhar Bharat initiative encourages localization of components like transformers, PCBs, and wire feeders.

Long-Term Outlook

• Strengthens the economy and promotes job creation.
• However, incentives alone may not help India achieve the scale and quality required to compete with global leaders.

Investments in technology incubation, skill development, and standardization are essential to position India as a global leader.

Welding Consumables and Quality Regulations

India is a growing market for welding consumables such as electrodes, wires, and fluxes, although specialty products are still largely imported.

The government is addressing quality concerns through:

• Anti-dumping duties
• Mandatory BIS certification for certain consumables

Long-Term Outcome

• Improved product quality and standardization
• Encourages domestic players to upgrade manufacturing capabilities
• Small manufacturers may struggle with compliance unless provided technical support

Supply Chain Risks and Policy Response

Global events such as the COVID-19 pandemic and geopolitical conflicts have exposed weaknesses in India’s supply chains, particularly in areas such as:

• Semiconductors for inverter machines
• Raw materials for fluxes and consumables
• CNC and robotic systems

Policy Response

• Promotion of semiconductor manufacturing
• Diversification of sourcing strategies
• Bilateral technology partnerships with countries like Japan, South Korea, and Taiwan

Over time, building resilient supply chains will be critical for sustaining competitiveness and growth.

Technology Transfer and FDI

Several global companies have established research, development, and manufacturing facilities in India, supported by policies allowing 100% Foreign Direct Investment (FDI).

Long-Term Benefits

• Access to advanced welding technologies such as laser welding, TIP-TIG, and hybrid welding
• Training and upskilling opportunities for Indian professionals
• Strengthening India’s innovation ecosystem

India should continue liberal trade policies that encourage co-development and intellectual property sharing.

Skilling and Certification Alignment

India currently faces a shortage of skilled welders. According to the Indian Institute of Welding (IIW), there is an estimated shortage of 1.2 million skilled welding professionals.

Trade policies can support workforce development through:

• International training partnerships
• Global recognition of Indian certifications (AWS, ASME, ISO)

Challenges

• Bureaucratic delays in allowing foreign trainers and demonstration equipment
• Need for alignment between trade policies and skill development initiatives

In the long run, India must position its welding workforce as a globally employable talent pool.

MSMEs and Trade Facilitation

India’s welding ecosystem is largely composed of MSMEs. However, many small businesses face difficulties accessing export markets due to:

• Complex documentation processes
• Limited access to trade finance
• Lack of awareness about FTAs and international standards

Required Support

• Simplified procedures and digital documentation
• Duty drawback schemes and export promotion initiatives
• Integration of MSMEs into global supply chains

Empowering MSMEs through improved trade facilitation can significantly expand India’s welding export base.

Conclusion

The welding sector in India is at a critical juncture. Trade policies are reshaping the industry across technology adoption, manufacturing capabilities, and global competitiveness.

While import substitution and protective duties may provide short-term benefits, the long-term success of the sector depends on balancing self-reliance with global integration.

Key Recommendations

• Maintain appropriate tariff levels while ensuring access to next-generation technologies
• Sign FTAs with strong focus on reciprocity, compliance, and standards alignment
• Promote green technologies while ensuring ESG compliance
• Strengthen MSME support and skill development programs
• Encourage foreign direct investment and export-oriented reforms

If trade policies are aligned with the evolving needs of the welding industry, India’s welding sector has the potential to become a global leader—not only in terms of volume, but also in quality, sustainability, and innovation.

For further information, check the reference link:
https://manufacturing.economictimes.indiatimes.com/news/industry/impact-of-current-trade-policies-on-the-welding-industry-in-the-long-run/124871247