Shares of JSW Steel and Tata Steel rallied on Wednesday with the government imposing final safeguard duties on imports of non-alloy and alloy steel flat products for three years through April 2028.
The move will help stabilise the domestic steel prices and improve medium-term profitability of primary and secondary steel makers, by keeping competition from low-priced imports at bay. However, for assorted users of steel, including the automobile industry, costs could inch up.
Phased Protection
According to a finance ministry notification issued on Tuesday, a 12% provisional duty imposed on April 21, 2025 will now remain as definitive tax till April 20, 2026. The duty will be reduced to 11.5% in the second year (till April 20 2027) and further to 11% in the third year (till April 20, 2028).
The decision follows the final findings of the Directorate General of Trade Remedies, which concluded that imports of the subject goods had risen sharply in a short span, harming domestic producers.
The new regime also includes a price-based exemption mechanism, to ensure that relatively high-priced imports don’t suffer the additional impost. In the case of hot rolled coil (HRC), for example, the safeguard duty will apply only if imports are priced at $675 a tonne or below, while the corresponding threshold for cold-rolled coils will be $824 a tonne.
The government had earlier imposed a provisional safeguard duty for 200 days starting April 21, 2025, following preliminary findings by the trade remedies authority. It has now clarified that the duty will not be levied for the period between the lapse of the provisional safeguard duty and the publication of the final notification.
The Reserve Bank of India in an article published in October had highlighted the vulnerability of India’s steel industry from competitive pricing by major steel-producing countries and “increased imports”. While this and the emphasis in the article on the need to increase the competitiveness of India’s steel sector are relevant, imports have not been rising in recent months, analysts reckon. There was a 29% fall in steel imports in the first half of the current fiscal year owing to various tariff and non-tariff barriers.
According to BigMiInt, imports of HRC in April-November 2025 from South Korea remained stable y-o-y at 1.87 mnt. Chinese exports to India plunged by 51% y-o-y to 1.14 mnt, while shipments from Japan fell 22% to 1.01 mnt, it added.
Industry body Indian Steel Association (ISA) welcomed the government’s move, saying it would help stabilise the domestic market amid global supply pressures.
JSW Steel shares were up 4.89% on Wednesday on the Bombay Stock Exchange, ending the day’s trading at Rs 1166 per share, while Tata Steel shares were up 2.3% at Rs 179.8 per share.
Strategic Safeguards
The safeguard duty will apply to a range of flat steel products, including hot rolled coils, sheets and plates; hot rolled plate mill plates; cold rolled coils and sheets; metallic coated steel coils and sheets (including galvanneal, coated with zinc or aluminium-zinc or zinc-aluminium-magnesium); and colour coated coils and sheets.
“There is a recent, sudden, sharp and significant increase in imports of the subject goods into India, which has caused and threatens to cause serious injury to the domestic industry/producers of subject goods,” the gazette notification said.
“The safeguard duty on flat steel products is a calibrated policy measure aimed at maintaining stability in the domestic steel market while ensuring continuity of supply for consumers and infrastructure projects,” Naveen Jindal, president of the ISA, said. “While the global steel industry is experiencing weak demand and excess capacity, India remains an oasis with growth in the steel market supported by domestic consumption and infrastructure-led expansion under the Atmanirbhar Bharat framework.”
He added that the diversion of surplus steel capacity into India by China, Japan, Korea and Vietnam had implications for domestic capacity utilisation, investment planning and employment. “The safeguard duty helps address these pressures by restoring competitive balance and supporting the domestic steel value chain,” Jindal said, adding that further trade remedies could be considered given ongoing global supply imbalances.
Certain imports from developing countries have been exempted from the safeguard duty, though the exemption does not apply to shipments from China and Vietnam, and Nepal, depending on the category. Several specialised steel products, including electrical steel, stainless steel, tinplate and aluminium-coated steel, have also been excluded.