India imposes 12% safeguard duty on certain steel imports

By Admin

22 Apr, 2025

India Imposes 12% Safeguard Duty on Steel Imports to Protect Domestic Industry

In a significant move to shield the domestic steel industry from a sudden surge in imports, the Government of India has imposed a 12% safeguard duty on certain flat steel products, both alloy and non-alloy. This decision, notified by the Ministry of Finance, comes in response to the recommendations of the Directorate General of Trade Remedies (DGTR), which operates under the Ministry of Commerce and Industry.

Surge in Imports Prompts Action

The DGTR's investigation, concluded last month, pointed to a "sudden and sharp" increase in steel imports, raising alarms about potential injury to the Indian steel industry. This surge, coupled with global market distortions, prompted urgent intervention. The safeguard duty is effective for 200 days from the date of notification and will be payable in Indian currency.

Impact of Global Trade Dynamics

India's move comes amid growing concerns of steel dumping, especially from countries like China. This trend follows the United States' imposition of a 25% duty on Chinese goods under Section 232 of its Trade Expansion Act, 1962. The Indian Steel Association (ISA) highlighted that between 2019 and 2023, over 129 trade remedy measures were imposed globally on steel products, indicating a rising trend in protectionist measures across major economies.

The ISA also raised concerns over an 80% spike in steel imports from China alone—reaching 1.61 million tonnes between January and July 2024. It emphasized that steel-producing nations such as China, Japan, and South Korea have capacities that significantly exceed their domestic needs, resulting in aggressive exports to countries like India.

Categories and Exemptions

While the safeguard duty is broadly applicable, the government has exempted several specialized steel products from this measure. These include Cold Rolled Grain Oriented Electrical Steel (CRGO), tinplate, stainless steel, rubber-coated steel, brass-coated steel, and aluminium-coated steel.

Furthermore, the safeguard duty will not apply to imports priced above a specified Cost, Insurance and Freight (CIF) threshold. Specifically, this includes hot rolled coils, sheets, and plates priced above $675 per metric tonne, and colour-coated coils and sheets (whether profiled or not) priced above $964 per metric tonne.

A Proactive Shield for Domestic Manufacturing

This safeguard measure highlights India's proactive approach in defending its domestic manufacturing capabilities. The DGTR, in its detailed findings, warned that the excess steel production in countries like China, Japan, and South Korea could be diverted to India if left unchecked, thereby causing significant injury to the local industry. The shift in Chinese production from long products to flat steel products—now being aggressively exported—poses a major challenge for Indian manufacturers.

Looking Ahead

While the 12% safeguard duty is a temporary measure, its implications are expected to be far-reaching. It offers a much-needed buffer for Indian steel producers to regain market share and stabilize production amidst volatile global trade conditions. However, with global overcapacity and dumping concerns remaining persistent, further long-term strategies may be necessary to ensure sustainable growth and competitiveness in India’s steel sector.