In a bold move to shield its steel industry, India has imposed a 12% provisional safeguard duty on certain steel imports, effective April 21, 2025. The decision, announced by the Ministry of Finance, aims to curb the influx of low-cost steel from countries like China, South Korea, and Japan, which has been flooding the Indian market and threatening local manufacturers.
Why the Duty?
India, the world’s second-largest crude steel producer, has seen a surge in steel imports, reaching a nine-year high of 9.5 million metric tons in the 2024/25 fiscal year. This flood of cheap steel, particularly from China, has forced domestic mills to scale back operations and consider job cuts. The Indian Steel Association, representing major players like Tata Steel, JSW Steel, and Steel Authority of India (SAIL), raised alarms about the “sudden and sharp” rise in imports causing serious harm to the industry.
The Directorate General of Trade Remedies (DGTR) investigated these claims and recommended the 12% duty, which will apply to non-alloy and alloy steel flat products like hot-rolled coils, cold-rolled sheets, and coated steel for 200 days. Imports priced above $675 to $964 per tonne (cost, insurance, and freight basis) are exempt, ensuring high-value shipments remain unaffected.
Key Fact: China, South Korea, and Japan account for nearly 78% of India’s finished steel imports, with China being the second-largest exporter to India in 2024/25.
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Industry and Government Response
Union Minister for Steel and Heavy Industries H.D. Kumaraswamy hailed the decision, stating, “This move will provide critical relief to domestic producers, especially small and medium-scale enterprises, who have faced immense pressure from rising imports.” Industry leaders echoed this sentiment, with Tata Steel’s CEO, TV Narendran, calling it a “critical step” to address unfairly priced imports.
However, not everyone is celebrating. The Global Trade Research Initiative (GTRI) warned that the duty could halt imports, forcing manufacturers to rely on domestic suppliers who may raise prices. Micro, small, and medium enterprises (MSMEs) in sectors like engineering fear higher input costs could make their products less competitive, especially with the U.S. imposing a 25% tariff on steel exports.
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What’s Next?
The safeguard duty is temporary, set to expire in November 2025 unless extended or revised. The DGTR will continue monitoring its impact, with a final report expected by August 2025. Analysts suggest that while the duty may stabilize domestic steel prices in the short term, long-term challenges like global oversupply and new domestic capacity additions could complicate the outlook.
For now, the duty signals India’s determination to protect its steel industry amid global trade tensions, including a recent U.S.-China trade war sparked by President Donald Trump’s tariffs. As the world’s steel markets adjust, India’s balancing act between protecting local producers and maintaining affordability for consumers will be closely watched.
Stay tuned to theinterviewtimes.com for updates on this developing story and its impact on India’s economy.