Import curbs, higher costs give steelmakers leverage for price hikes

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• India imposes 3-year safeguard duty up to 12% on select steel imports
• Duty aims to curb cheap imports, mainly from China, Vietnam, and Nepal
• Steelmakers may hike prices by Rs 1,000 per tonne as demand rises

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The latest safeguard duty on select steel products is expected to offer relief to producers such as JSW Steel, as the levy is likely to curb low-priced imports and create headroom for price increases in the coming quarters, according to industry experts and analysts. The move maybe a win-win for the domestic steel mills as demand firms up from the autos and construction sectors post monsoon, with analysts expecting atleast Rs 1,000 per tonne price hike.

On December 30, India imposed a three-year import tariff of between 11 percent and 12 percent on some steel products, according to a finance ministry order, as the government aims to curb cheap shipments from China. The levy, locally known as a safeguard duty, will be imposed at 12% in the first year followed by 11.5% in the second year and then 11% in the third year. The measure excludes imports from certain developing countries, though China, Vietnam, and Nepal will be subject to the levy.

Among the steel products under safeguard duty include hot rolled coils, sheets and plates, cold rolled coils and sheets, metallic coated steel coils, color coated coils and sheets etc, which typically finds its use in heavy engineering, shipbuilding, automobiles, consumer durables, appliances, furniture and precision engineering applications among others. Duty exemptions have also been provided to certain product categories, such as cold rolled grain oriented electrical steel (CRGO) and stainless steel, which have uses in renewable energy, transmission, and other strategic sectors, reflecting the need to maintain supply chains.

The safeguard duty applies to flat steel products, which account for about 60 percent of India’s steel imports. Imports are unlikely to stop entirely, but the duty could reduce overall steel imports by 20–25 percent in FY26 and FY27, Dhruv Goel, chief executive officer, Bigmint, a market analytics firm.

Industry expresses optimism

The longer-term duty, after a temporary 200-day duty announced by the government in April 2025, has been demanded over the past two years by the steel industry, who have complained "unfair" competition from imports, especially with Chinese manufacturers dumping large quantities of cheaply priced steel in India.

"The safeguard duty on flat steel products is a calibrated policy measure aimed at maintaining stability in the domestic steel market while ensuring continuity of supply for consumers and infrastructure projects. While the global steel industry is experiencing weak demand and excess capacity, India remains an oasis with growth in Steel market supported by domestic consumption and infrastructure-led expansion under the Atmanirbhar Bharat framework," said Naveen Jindal, chairman of Jindal Steel, and president, Indian Steel Association, in a statement.

Steel prices in India, especially for flat steel that is used in industries such as automobiles and appliances, have been flat-to-negative for the past few quarters, owing to sluggish demand for end products and the continued imports of competitively-priced products from countries such as China, Vietnam, and South Korea. Jindal added that the duties help restore balance in favour of Indian steelmakers, and also called for additional trade measures.

"...the diversion of surplus steel capacity into India by China, Japan, Korea and Vietnam has implications for domestic capacity utilisation, investment planning, and employment. The safeguard duty helps address these pressures by restoring competitive balance and supporting the domestic steel value chain. Given ongoing global supply imbalances, further trade remedies may be considered as part of a broader policy approach to ensure sustainable growth in the steel sector," Jindal remarked in his statement.

Leverage for price hikes 

Analysts said the safeguard duty will give steelmakers room to sustain price hikes, as rising input pressures , including a $10–15 per tonne increase in coking coal prices over the past month and a weaker rupee, have pushed up costs and strengthened mills’ case for higher prices.

"The measure will protect any downside to steel prices. Had it not been imposed, the continuous dumping from China would have made it difficult for the mills to carry out any price hikes. Currently, the domestic steel is at a 4 per cent discount compared to the landed cost of imported steel, this will rise to 14 percent discount after the safeguard duty, creating some buffer for the steel mills to hike prices," said Aditya Welekar, AVP at Axis Securities.

"I would say that prices have already increased but there is still some scope maybe of another 1,000-1,500 rupees but beyond that, I think there will be resistance or it will be difficult for the market to absorb such sharp hikes., If somebody has to import your rolled product or HR coil from countries like Japan, China, it will be still expensive. From current level, it will be expensive by maybe $40-$45," said Goel.

However, steeper hikes could face resistance as prices have already risen by about Rs 2,000–2,500 per tonne since October and are up roughly Rs 3,500–4,000 per tonne from the October bottom.

Flat steel prices, tracked via hot rolled coil (HRC), plummeted historically by 52.7 percent from the all-time peak of Rs 76,025 in April 2022 to the lowest of Rs 35,938 in June 2020. Subsequent corrections, like from 2022 highs to 2024-2025 lows around Rs 46,750-Rs 47,100, according to BigMint.

The industry's current situation, of sluggish pricing due to global overcapacity and dumping, is a sharp contrast to their immediate post-pandemic fortunes, as raw material shortages, high logistics costs, and a backlog in consruction activity caused a surge in steel prices, which helped build up significant cash reserves for steelmakers.

End-use industries such as automobiles, white goods, as well as small and medium-scale industries in the metals and alloys space had approached the government for action against steelmakers, accusing them of profiteering and above-normal price increases. The Union government responded by imposing export duties in May 2022 on some grades of steel, as well as iron ore, in order to increase domestic availability and reduce prices. The export duties were rolled back in November 2022.

"Historically, the impact of safeguard or import duties on domestic steel prices has been negligible, as seen in the past as well. Prices typically firm up during the January to April period every year, and PEB companies factor this seasonality into their project pricing for clients. From our perspective, we do not see any impact on margins in the coming quarter or even going forward. For well-managed companies, it is more a matter of disciplined business and project cost management rather than steel prices moving up or down," said Arvind Nanda, Managing Director, Interarch Building Solutions Limited.

India remains net steel importer

The 200-day-duty imposed in April, after a long period of investigation by the Directorate General of Trade Remedies (DGTR), did slow steel imports to India, with data from market analytics firm BigMint showing that in the January-to-November period, imports declined by 13.5 percent year-on-year to 8.81 million tonne, which included a sharp decline in the imports of finished flat products.

However, India also remained a net importer of steel over the same period, with exports across steel products declining slightly year-on-year in 2025 over the same period to 7.53 million tonne, amid sluggish steel sales globally, and continued competition, overcapacity in Chinese markets, and trade and pricing wars.