Introduction
To counter the surge in steel imports, India’s Directorate General of Trade Remedies (DGTR) has proposed a 12% safeguard duty on imported flat steel products for 200 days. This move aims to protect domestic steel manufacturers from price pressures and excessive foreign competition. The Finance Ministry is expected to review the recommendation within 15 days before finalizing the decision.
Why is the Safeguard Duty Being Imposed?
The Indian steel industry has witnessed a sharp rise in cheap steel imports, particularly from countries like China, South Korea, and Vietnam. This surge has created pricing pressure on domestic steel producers, affecting their profitability and competitiveness. The safeguard duty is designed to:
✅ Protect Indian manufacturers from unfair trade practices.
✅ Stabilize domestic steel prices and ensure fair market competition.
✅ Encourage self-reliance in the steel sector under the Atmanirbhar Bharat initiative.
Impact on the Steel Industry & Economy
For Domestic Steel Companies
🔹 Positive for stocks of Tata Steel, JSW Steel, and SAIL.
🔹 Higher domestic demand could improve profit margins.
🔹 Reduced reliance on imports may strengthen India’s steel supply chain.
For Importers & End Users
🔹 Steel-dependent industries (auto, construction, infrastructure) may see higher raw material costs.
🔹 Potential price hikes in consumer goods reliant on steel.
🔹 Importers may seek alternative sourcing or negotiate better domestic rates.
Legal Framework & Precedents
Safeguard duties fall under the Customs Tariff Act, 1975, which allows India to impose temporary duties to protect local industries from import surges. In 2016, India levied a similar safeguard duty of 20% on hot-rolled steel imports, which helped stabilize the industry.
What’s Next?
🔹 The Finance Ministry will review the proposal within 15 days.
🔹 If approved, the duty will be in effect for 200 days before a further review.
🔹 Industry stakeholders are expected to lobby for long-term protection measures.