India imposes 12% safeguard duty on some steel products to curb cheap China imports

India, the world's second-biggest crude steel producer, was also a net importer of finished steel for the second consecutive year in the 2024/25 fiscal year

India imposed a 12% safeguard duty on some steel products to stem unbridled imports, a government notification said on Monday.

"The safeguard duty imposed under this notification shall be effective for a period of two hundred days (unless revoked, superseded or amended earlier) from the date of publication of this notification," the Ministry of Finance said.

New Delhi's tariffs are primarily aimed at China, which was the second-biggest exporter of steel to India behind South Korea in 2024/25.

The government has set the import prices between USD 675 per tonne to USD 964 per tonne for the five steel product categories. Any shipment imported below these import prices would attract the safeguard duty. The safeguard duty shall not be imposed on the product categories when imported into India at or above the speficied import price on CIF (cost insurance freight) basis, according to the notification.

The product categories are Hot Rolled coils, sheets and plates; Hot Rolled Plate Mill Plates; Cold Rolled Coils and Sheets; Metallic Coated Steel Coils and Sheets; and Colour Coated coils and sheets, whether or not profiled.

Last year in December, the Directorate General of Trade Remedies (DGTR) started the investigation into the sudden surge in imports of 'Non-Alloy and Alloy Steel Flat Products', used in various industries, including fabrication, pipe making, construction, capital goods, auto, tractors, bicycles, and electrical panels.

While some big domestic steel makers are advocating for imposition of the duty, the user industry is strongly against it as the duty would push raw material prices, impacting their competitiveness.

MSME exporters from the engineering sector have stated that any move to impose additional duties on steel imports would make domestic products uncompetitive and impact the country's outbound shipments from the sector.

Safeguard measures in the form of duty or quantitative restrictions are trade remedies available to the World Trade Organization member-countries. They are imposed to provide a level-playing field to domestic players in case of sudden and significant increase in imports of a product. The measure is used when imports of a particular product increase unexpectedly to a point that they cause or threaten to cause serious injury to domestic producers.

These duties are applicable against all the countries with uniform rate of duty unlike the anti-dumping duties. Welcoming the safeguard duties, Union Steel Minister H D Kumaraswamy said, "The move will provide critical relief to domestic producers, especially small and medium-scale enterprises, who have faced immense pressure from rising imports. The safeguard duty will help restore market stability and reinforce the confidence of the domestic industry." Indian Steel Association said the import duty will protect Indian manufacturers from unfair imports.

"We welcome the government’s decisive move to impose a 12 per cent safeguard duty on certain steel products. This important step will protect Indian manufacturers from unfair imports, boost domestic production, and accelerate our journey towards a stronger, Atmanirbhar Bharat. We thank Hon’ble Prime Minister Shri Narendra Modi for his visionary leadership and steadfast support to the steel sector," Naveen Jindal, President, Indian Steel Association, said in a statement.

With Agency Inputs