In an effort to protect its local steel industry, India has placed a 12 per cent temporary safeguard duty on certain imported flat steel products, both alloy and non-alloy. This duty will be in effect for 200 days and aims to stop the inflow of cheaper steel from countries like China, South Korea, and Japan, which has been hurting domestic manufacturers.
India, currently the world’s second-largest producer of crude steel, experienced a steep rise in steel imports during the 2024-25 financial year, reaching a nine-year high of 9.5 million metric tons. Imports from China rose by 3.4 per cent to 2.3 million metric tons, those from South Korea increased by 11.7 per cent to 2.4 million metric tons, and imports from Japan saw a sharp jump of 88.6 per cent to 1.8 million metric tons. Combined, these three countries accounted for 78 per cent of India’s total finished steel imports.
After receiving complaints from domestic producers, the Directorate General of Trade Remedies (DGTR) launched an investigation in December 2024. It found that the sharp rise in imports was damaging Indian steelmakers, causing underuse of their production capacity and financial losses.
Welcoming the move, Union Steel Minister H. D. Kumaraswamy thanked Prime Minister Narendra Modi for supporting the Atmanirbhar Bharat (self-reliant India) vision. He said the safeguard duty would help local producers, especially small and medium-sized companies, by bringing stability and boosting confidence in the steel sector.
To strengthen the domestic industry and reduce reliance on imports, the government has already taken several steps. These include launching the Production Linked Incentive (PLI) scheme for specialty steel to promote local production, enforcing steel Quality Control Orders to ban sub-standard products, and applying the Domestically Manufactured Iron and Steel Products (DMI&SP) Policy to encourage the use of ‘Made in India’ steel in government purchases. Additionally, anti-dumping duties and countervailing duties are already in place for various steel products coming from countries such as China, South Korea, Japan, Vietnam, and Thailand.
Major companies like JSW Steel, Tata Steel, Steel Authority of India Limited (SAIL), and ArcelorMittal Nippon Steel India have welcomed the safeguard duty. Following the announcement, stock prices of these companies went up, SAIL gained 3.99 per cent, Tata Steel rose by 2.52 per cent, and JSW Steel saw a 1.35 per cent increase on the BSE.
However, the new duty has drawn attention internationally. Japan has asked for an exemption, arguing that it exports high-quality specialty steel that India cannot yet produce locally. During the recent India-Japan Steel Dialogue in New Delhi, Japanese officials expressed concern about how the new tariff might affect bilateral trade.
The DGTR has clarified that imports from developing countries except China and Vietnam, will not be affected by this duty if their share in total steel imports is less than 3 per cent. Additionally, some high-grade steel products will be excluded from the duty to ensure fair pricing and avoid harming other industries.
While the duty is meant to support local steelmakers, there are worries that it could raise costs for sectors like automobiles, infrastructure, and renewable energy. Despite these concerns, the government believes that the need to protect domestic producers outweighs the risks. Officials say they will keep working with stakeholders to ensure the steel industry remains strong, self-reliant, and competitive on a global scale. This duty, they say, is a strategic step to counter global trade challenges and boost India’s standing in the steel market.
Comments