India Plans to Impose Temporary 25% Duty on Steel Imports

India is set to introduce a temporary "safeguard duty" of up to 25% on steel imports, a measure aimed at stabilizing the domestic steel market and curbing the influx of cheap products from China, according to Reuters.

This move comes in response to mounting losses faced by domestic steel producers, largely attributed to the growing import of inexpensive Chinese steel. The final decision on this safeguard duty will follow an investigation by India’s Directorate of Trade Remedies, expected to conclude within a month.

To alleviate concerns of small and medium-sized enterprises (MSMEs), major steel manufacturers such as JSW Steel, Tata Steel, and ArcelorMittal Nippon Steel India have committed to providing steel at discounted rates. Pankaj Chadha, chairman of the Engineering Export Promotion Council of India, stated that registered MSMEs will be able to purchase raw materials at export prices, which are approximately 20% lower than prevailing market rates. This initiative is expected to significantly benefit smaller producers, who collectively consume around 1 million tons of steel annually.

India, currently the world’s second-largest steel producer, has faced a shift in its trade dynamics this year, becoming a net importer due to a surge in Chinese steel supplies. Between April and October, India imported a record 1.7 million tons of Chinese steel, marking a 35.4% increase compared to the same period in 2023. Overall, imports of rolled steel products into India reached a seven-year high of 5.7 million tons during this timeframe. Key imports included stainless steel, hot-rolled coils, galvanized sheets, and electrical steel.

The proposed two-year safeguard duty aims to limit these imports, protect domestic producers from unfair competition, and stabilize the market. By implementing this measure, India hopes to bolster its domestic steel industry and address the challenges posed by the influx of low-cost imports.