India Imposes 12% Safeguard Duty, Aims To Shield Steel Industry From Import Surge
New Delhi: In a significant move to protect domestic steel producers, the Indian government has imposed a 12 per cent provisional safeguard duty on five categories of imported steel products. This duty will be applicable for a period of 200 days starting from the date of the notification’s publication.
The imposition follows a recommendation from the Directorate General of Trade Remedies (DGTR), which found that a recent surge in steel imports was causing serious harm to the local industry. The duty is meant to provide temporary relief to Indian steel manufacturers facing intense pressure from cheap imports.
Products and Price Thresholds Identified
The safeguard duty covers five major steel categories:
- Hot Rolled Coils, Sheets and Plates
- Hot Rolled Plate Mill Plates
- Cold Rolled Coils and Sheets
- Metallic Coated Steel Coils and Sheets
- Colour Coated Coils and Sheets (profiled or not)
To avoid unnecessary penalties, the government has set minimum import price thresholds ranging from USD 675 to USD 964 per tonne (CIF). The safeguard duty will only apply to imports priced below these levels, thus exempting higher-value imports.
Investigation Reveals Surge in Imports
The DGTR initiated its investigation in December 2024, after the Indian Steel Association raised concerns on behalf of major players including JSW Steel, SAIL, Jindal Steel, and ArcelorMittal Nippon Steel India.
The findings revealed that steel imports jumped from 2.29 million tonnes in 2021-22 to 6.61 million tonnes during the investigation period (Oct 2023–Sept 2024). The primary sources of these imports were China, Japan, South Korea, and Vietnam.
The surge, attributed to excess steel capacity in those countries amid weak local demand, posed a serious threat to the competitiveness and sustainability of India’s steel sector.
Industry Reacts: Mixed Responses
The decision has sparked a sharp divide between producers and users. While the Indian Steel Association hailed the move as a crucial step towards an Atmanirbhar Bharat, downstream industries, particularly MSME exporters in engineering, voiced strong opposition.
According to FIEO President S C Ralhan, the duty would increase domestic steel prices from Rs 5,400 to Rs 6,000 per tonne, harming export competitiveness—especially in light of the 25 per cent U.S. tariffs on steel.
Still, Union Steel Minister H D Kumaraswamy defended the decision, highlighting its importance in restoring market balance and supporting small and mid-sized producers overwhelmed by import-driven price pressures.
WTO-Compliant Trade Remedy
The safeguard duty is a WTO-sanctioned trade remedy, distinct from anti-dumping duties, in that it is uniformly applicable to all countries rather than targeted. It is deployed when imports rise sharply and unexpectedly, threatening the domestic industry with serious injury.
As India continues to balance trade liberalization with domestic manufacturing goals, this temporary measure signals a protective pivot in policy—favoring internal growth over unchecked global inflows.
(With agency inputs)
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