The Business Bytes
THEBUSINESSBYTES BUREAU
NEW DELHI, APRIL 21, 2025
In a bid to shield domestic steel producers from the surge of imports, the Indian government has imposed a provisional safeguard duty of 12 per cent on five key steel product categories for a period of 200 days. The move aims to safeguard the interests of local players against the rising influx of steel products from countries like China, Japan, South Korea, and Vietnam.
The decision follows a recommendation from the Directorate General of Trade Remedies (DGTR), which had conducted an investigation into the significant rise in steel imports, including hot-rolled coils, sheets, plates, cold-rolled coils, metallic-coated, and color-coated steel. The inquiry, initiated last year, found that such imports had increased drastically — from 2.293 million tonnes in 2021-2022 to 6.612 million tonnes during the current investigation period — posing a threat of serious injury to the Indian steel industry.
The safeguard duty will be applied to any steel imports priced below the threshold set by the government, which ranges between USD 675 to USD 964 per tonne. Imports above this price point will be exempt from the duty. This action is in response to a surge in imports that has been exacerbated by significant overcapacity in production in the exporting nations due to slowing domestic demand.
Union Steel Minister H.D. Kumaraswamy expressed his support for the move, emphasizing that it would provide critical relief to India’s steel industry, particularly small and medium-scale enterprises that have been under immense pressure due to the influx of foreign steel. He noted that this measure would help stabilize the market and boost the confidence of domestic producers.
“The safeguard duty will restore the competitiveness of Indian manufacturers and reduce the market distortion caused by unfairly priced imports,” said Kumaraswamy.
While large domestic steel manufacturers have largely welcomed the government’s decision, the move has sparked concerns in certain sectors. User industries and MSME exporters, particularly from the engineering sector, have expressed opposition, fearing that the additional duties could lead to higher raw material costs and impact the competitiveness of Indian exports.
Federation of Indian Export Organisations (FIEO) President S.C. Ralhan voiced concerns that the safeguard duty would disproportionately benefit only a handful of large domestic companies while harming India’s engineering exports. He pointed out that the imposition could drive up steel prices significantly, further complicating the already challenging export environment, especially as the U.S. has imposed a 25 per cent tariff on steel and aluminum.
The safeguard duty is a trade remedy available under World Trade Organization (WTO) rules, designed to protect domestic industries when there is a sudden surge in imports that threatens to cause harm. The measure is applied uniformly across all countries and is distinct from anti-dumping duties, which target specific nations engaged in unfair trade practices.
Industry leaders, including Naveen Jindal, President of the Indian Steel Association, have strongly supported the government’s decision. Jindal stressed that the safeguard duty would not only protect manufacturers but also contribute to the broader goal of building an “Atmanirbhar Bharat,” or a self-reliant India.
“This decisive action will help strengthen the Indian steel industry, ensuring fair competition and fostering a healthier industrial ecosystem,” Jindal said. He further thanked Prime Minister Narendra Modi for his continued support of the steel sector and his leadership in fortifying India’s manufacturing capabilities.
