India to Impose 12% Safeguard Duty on Steel Imports

The Directorate General of Trade Remedies (DGTR), under the commerce ministry, has recommended a 12% provisional safeguard duty on certain steel products. This step aims to protect the domestic steel industry from cheap imports. The final decision will be made by the finance ministry.

In its notification, the DGTR stated that the situation is urgent and any delay in imposing safeguard measures could cause irreparable damage. It has suggested a 12% duty for 200 days while a final decision is being considered.

Impact on Indian Steel Industry

This safeguard duty will help Indian steel producers manage the risk of trade diversions from countries like Japan and South Korea. The move follows US President Donald Trump’s 25% import tariff on steel imports, which could lead to an increase in shipments to India.

Market analysts predict that the duty could result in steel price hikes in the coming months, with an immediate rise of ₹1,500-₹2,000 per tonne. 

Steel Stocks React Positively

Following the announcement, steel stocks gained on Wednesday:

• JSW Steel and Tata Steel rose by 3%, making them among the top 10 gainers in the Nifty50 index.
• SAIL (Steel Authority of India Limited) saw a 3.7% rise in its stock price.

DGTR’s Investigation on Rising Imports

The DGTR conducted an investigation and found a sharp rise in steel imports in recent years. Key findings include:

• Imports rose from 2.293 million tonnes in 2021-22 to 6.612 million tonnes during the investigation period (October 2023 – September 2024).
• Steel products affected by the duty include hot-rolled (HR) coils, sheets, plates, cold-rolled coils, and metallic-coated steel sheets.
• Major exporting countries include China, Japan, Korea, and Vietnam.

Concerns of MSME Exporters

While the duty helps large domestic steel producers, MSME exporters in the engineering sector are worried. They fear that higher steel prices will make Indian products uncompetitive in global markets, hurting exports.

Industry associations are urging the government to introduce export parity pricing for smaller businesses. This would help them stay competitive despite rising raw material costs.

Conclusion

The 12% safeguard duty on steel imports aims to support domestic manufacturers but may lead to higher prices for industries using steel, especially small and medium enterprises. The final decision from the finance ministry is awaited.

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