The Directorate General of Trade Remedies (DGTR), under the commerce ministry, has recommended a 12% provisional safeguard duty on some steel products to protect the local industry from below-cost imports. A final decision will be taken by the finance ministry.
In a notification, the DGTR said critical circumstances exist wherein any delay in application for provisional safeguard measures would cause damage which would be difficult to repair. “The authority recommends imposition of provisional safeguard duty at the rate of 12% ad valorem for 200 days pending final determination on imports of the product under consideration,” the notification said.
The tax will help Indian steel producers counter any potential trade diversions from countries such as Japan and South Korea following US President Donald Trump’s imposition of 25% import tariffs on steel imports from certain countries.
Steel stocks rose on Wednesday as analysts forecast a boost to the firms’ earnings. They believe the imposition of the duty could result in price hikes in the next few months after rising to Rs 1,500- Rs 2,000 in the near term. Analysts at JP Morgan believe there is room to raise earnings estimates of steel companies.
Share prices of JSW Steel and Tata Steel rose about 3% to be among the top 10 gainers in the benchmark Nifty50 index. The stock of state-run SAIL rose 3.7%.
According to Sehul Bhatt, director-research, Crisil, said the imposition of a 12% provisional safeguard duty on some non-alloy and alloy steel products will provide pricing support to local manufacturers in the first half of fiscal 2026. “This comes amid evolving trade dynamics where some countries have imposed restrictions on imports of steel. It will also addresses worries around rising imports in India,” he said.
The DGTR’s recommendation follows a probe it conducted which revealed a sudden, sharp and significant increase in the imports of steel products into India in recent times. The products singled out for the probe include hot-rolled (HR) coils, sheets and plates, HR plates, mill plates, cold-rolled coils and sheets, and metallic coated steel coils and sheets.
The imports, the DGTR believes, are threatening to cause serious injury to the domestic producers. Import of these products increased from 2.293 million tonne in 2021-22 to 6.612 million tonne during the period of investigation (October 2023 to September 2024, and the three preceding fiscals). The imports are being made from countries, including China, Japan, Korea, and Vietnam.
Domestic steel players have raised concerns over increasing imports of steel from nations like China. However, MSME exporters from the engineering sector have said 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.
While the duties will come as a relief to primary producers, it will increase prices for the user industry. In particular, smaller enterprises may suffer as a result of the price hikes and industry associations have called for export parity prices for these units so that they can maintain their export competitiveness.