In a move to curb the impact of rising steel imports, the Indian government has proposed a 12% provisional safeguard duty on certain steel products for a 200-day period. The measure, recommended by the Directorate General of Trade Remedies (DGTR), is intended to shield domestic manufacturers from potential financial strain caused by a surge in foreign steel supplies.
Justification for the Safeguard Duty
The DGTR’s order highlighted that delaying the imposition of protective tariffs could lead to irreversible damage to local industries. The findings pointed to a significant increase in steel imports, particularly from China, South Korea, and Japan, as a major cause of concern.
A key factor behind the influx is the trade shift triggered by U.S. import restrictions introduced in 2018. Countries affected by these restrictions sought alternative markets, directing surplus steel towards India. In response, regions such as the European Union, South Africa, Turkey, Vietnam, and Malaysia introduced their own protective tariffs to curb excessive imports.
“To counter the diversion of steel trade from the U.S. and other restricted markets, India’s safeguard duty must be substantial enough to prevent a similar influx,” the DGTR stated in its order.
Also read: Tata Steel Calls for Import Duties to Protect Industry
Next Steps and Exemptions
The government has opened a 30-day consultation period for stakeholders to submit feedback, following which an oral hearing will be conducted before finalizing the duty.
While the proposed measure applies broadly to steel imports, certain specialized steel categories, including stainless steel, cold-rolled grain-oriented electrical steel, and aluminium-coated steel, have been excluded from the duty.
This safeguard duty is intended as a temporary measure to stabilize the domestic steel industry, with further action expected based on the final review.
