India is poised to take decisive action against the influx of inexpensive steel imports, particularly from China. A government insider has revealed that a temporary safeguard duty of 12% will be imposed on steel imports to protect the domestic industry from the adverse effects of cheap foreign steel. This move aims to support local manufacturers and is expected to be implemented swiftly.

Safeguard Duty: A Protective Measure for Domestic Steel Industry

India, recognized as the second-largest crude steel producer globally, has faced challenges as a net importer of finished steel for the second consecutive year. The preliminary data for the 2024/25 fiscal year indicates that finished steel imports reached a staggering 9.5 million metric tons, the highest level in nine years.

• 12% safeguard duty on select steel products for 200 days.
• Recommendation from the Directorate General of Trade Remedies (DGTR) following an investigation into the impact of imports on local steel producers.
• The investigation was initiated in December 2022 to assess whether the flood of foreign steel has harmed India’s domestic market.

Rising Imports and Industry Concerns

Imports from countries like China, South Korea, and Japan have surged, accounting for an astonishing 78% of India’s total finished steel imports. The first ten months of the financial year that concluded in March witnessed record-high shipments from these nations. This significant influx has compelled smaller Indian steel mills to reconsider their operations, leading to potential job losses.

Industry leaders, including major players like JSW Steel, Tata Steel, and ArcelorMittal Nippon Steel India, have voiced their apprehensions regarding these imports. They advocate for protective measures to ensure the sustainability of the local steel sector.

Next Steps and Government Response

A source familiar with the situation confirmed, "There is clarity that the duty would be 12%, and a decision is expected promptly." Although the Ministry of Finance is responsible for finalizing this decision, they did not respond immediately to inquiries.

India’s initiative to impose a safeguard duty aligns with a growing trend among nations seeking to mitigate the impact of cheap imports on their domestic industries. By prioritizing the local steel sector, India aims to bolster its manufacturing capabilities and secure jobs for its workforce.

In conclusion, the introduction of the 12% safeguard duty reflects India’s commitment to protecting its steel industry from the adverse effects of foreign competition. This decision could serve as a crucial step toward ensuring the stability and growth of domestic steel production in the face of global market pressures.