The Directorate General of Trade Remedies (DGTR) has recommended a 12% provisional safeguard duty on certain steel products to shield domestic manufacturers from a surge in below-cost imports. The final decision now rests with the finance ministry.
In a notification, the DGTR pointed to "critical circumstances" that could lead to irreparable damage if immediate action is not taken. The proposed duty would apply for 200 days while authorities make a final decision on the matter.
Steel imports into India have risen sharply, jumping from 2.293 million tonnes in 2021-22 to 6.612 million tonnes during the investigation period (October 2023 to September 2024, plus the three preceding years). Much of this steel is coming from China, Japan, South Korea, and Vietnam. The DGTR’s investigation suggests that these imports are putting significant pressure on Indian steelmakers, threatening to cause serious harm to the domestic industry.
Adding to the concerns is the global trade environment. US President Donald Trump’s decision to slap a 25% tariff on steel imports from certain countries has raised fears of trade diversion, meaning excess steel could be finding its way to India instead. The safeguard duty is seen as a way to counter this trend and support local producers.
Steel stocks saw an uptick following the DGTR’s recommendation, with analysts predicting that the move could allow companies to raise prices. In the short term, steel prices may climb by ₹1,500-₹2,000 per tonne, and some experts believe there is room for even higher price adjustments in the coming months.
On March 20, shares of JSW Steel and Tata Steel rose by around 3%, ranking them among the top gainers on the Nifty50 index. The stock of state-owned SAIL saw an even bigger jump, rising 3.7%.
Not everyone is on board with the safeguard duty. While major steel producers may benefit, industry groups representing small and medium-sized enterprises (SMEs) have raised concerns.
Engineering exporters argue that higher steel prices will push up production costs, making Indian goods less competitive in global markets.
Some have called for measures to ensure that smaller businesses can still source steel at internationally competitive prices to maintain their export viability.
The finance ministry will now take the final call on whether to impose the safeguard duty. If approved, the tax would be in place for 200 days while authorities conduct further assessments.
