India Imposes 12% Safeguard duty on Steel Import – Statistics, Economic Impact & Analysis

Table of contents:

• Govt. steps on 12% safeguard duty
• Past import statistics
• China steel import – threat to domestic steel industry
• Necessity of 15% duty on imports from China
• Economics impact
• Conclusion

Update on (23 March 2025): India imposes a 12% safeguard duty on certain steel products, including non-alloy and alloy steel flat products, for a period of 200 days.

The recommendation comes after the Directorate General of Trade Remedies (DGTR) investigated a petition filed by the Indian Steel Association (ISA), which represents leading domestic steel producers. They raised concerns about a sharp increase in imports that threatens local manufacturers.

More detailed on the latest updates – Steel export and import – Latest updates

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The Indian steel industry, a cornerstone of the national economy, is facing a significant challenge: a relentless surge in steel imports, particularly from China steel imports. This influx threatens to destabilize the domestic steel market, impacting job protection, market stability, and the broader economic impact.

In response, the Indian government is poised to implement a 15% safeguard duty on select steel tariffs, a measure recommended by the Directorate General of Trade Remedies (DGTR) to combat unfair competition and ensure trade protection.

This article delves into the rationale behind this decision, the import statistics, and the potential economic impact on the global steel market.

Must read: Rising Steel Imports: Challenges and Prospects for India’s MSME Sector

Let’s Understand the Import Statistics:

To grasp the urgency of this measure, it’s essential to examine the import data. Over the past five years, India has witnessed a steady increase in rising imports, particularly in non-alloy steel and alloy steel flat products.

• 2019-20: India imported approximately 5.8 million tonnes of finished steel.
• 2020-21: Imports rose to 6.5 million tonnes, reflecting a growing reliance on foreign steel.
• 2021-22: The trend continued, with imports reaching 7.2 million tonnes.
• 2022-23: Imports surged to 8.3 million tonnes, indicating a significant import surge.
• 2023-24: The upward trajectory persisted, with imports reaching 9.5 million tonnes.
• 2024 (April-January): 8.29 million tonnes, a 20% increase compared to 6.89 million tonnes in the same period of 2023-24.

Source: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2080160

This data highlights a clear trend of increasing dependence on steel imports, posing a threat to the domestic steel industry.

Must read: India’s Steel Crisis? Import Curbs Set to Disrupt MSMEs – Survival Guide Inside!

The threat to India’s Steel Industry

The influx of China steel imports and other FTA imports poses several challenges:

• Price Undercutting: Imported steel, often subsidized, is priced significantly lower than domestically produced steel, leading to price undercutting. This creates an unfair competition scenario.
• Market Share Erosion: As rising imports flood the market, domestic producers lose market share, impacting their profitability and sustainability.
• Job Losses: A weakened domestic steel sector can lead to job losses in manufacturing and related industries.
• Investment Dampening: The uncertainty created by trade tensions and import threat can deter investments in the Indian steel industry.
• Trade Deficit: Increased steel imports contribute to the widening trade deficit.
• Supply Chain Vulnerabilities: Over-reliance on imports introduces vulnerabilities to India’s supply chain.

Must read: Impact on Metal Prices after Trump’s 25% Tariff on Steel Imports

The Necessity of the 15% Safeguard Duty

The 15% safeguard duty, recommended by the DGTR, is a crucial step to address these challenges. The Commerce Ministry will finalize the trade policy implementation.

• Level Playing Field: The duty aims to create a level playing field by offsetting the price advantage of imported steel.
• Domestic Industry Protection: It provides temporary relief to the domestic steel industry, allowing it to adjust to competitive pressures.
• “Make in India” Initiative: It supports the government’s “Make in India” initiative by promoting domestic production.
• Market Stability: It helps maintain market stability and prevent excessive price volatility.
• DGTR Investigation: The DGTR investigation confirmed that the import surge was harming the domestic industry, justifying the trade remedies.
• Global Context: Many nations are utilizing protectionism to shield strategic industries.

Economic Impact and Future Outlook

The economic impact of the steel tariffs is multifaceted:

• Positive Impacts: Increased domestic production, job creation, and reduced trade deficit.
• Potential Challenges: Possible increase in steel prices for consumers.
• Global Steel Market: The global steel market is facing challenges due to overcapacity and trade war dynamics.
• Long-Term Strategy: The safeguard duty is a temporary measure. The Indian steel industry must focus on enhancing its competitiveness through technological advancements.

Key Products Affected:

The safeguard duty will apply to various flat steel products, including:

• Hot-rolled coils
• Hot-rolled plates
• Coated steel
• Color-coated steel

Conclusion:

The implementation of the 15% safeguard duty is a strategic move to protect India’s vital steel industry. By addressing the import threat and ensuring fair competition, the government is supporting the long-term viability of this crucial sector.

It would be interesting to see the impact on domestic steel demand. If import increases from other countries like south korea or Japan, then it will not solve the problem. We still hope it solve the problem for domestic steel manufacturers.

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