India imposes three-year safeguard duty on some steel products to curb cheap imports

NEW DELHI: India has imposed a three-year safeguard duty of 12% on steel imports, according to a finance ministry order issued late on Tuesday, as the government aims to curb cheap shipments, especially from China.

The staggered duty, which will fall by half a percent each in the second and third years, will only be applicable on products imported at prices below certain thresholds, according to a gazette notification dated 30 December. The duty will be levied on key flat steel products, including hot rolled coils and plates, cold rolled coils, metallic coated and colour-coated steel.

“The measure will provide a cushion for domestic steelmakers by preventing a sharp fall in prices,” said Dhruv Goel, chief executive officer of Big Mint, a commodities market intelligence firm.

The move follows a 12% provisional safeguard duty imposed in April, which expired on 7 November. The final duty will not apply to imports during the gap between the lapse of the provisional duty and the day preceding the publication of the notification in the gazette.

In August, the Directorate General of Trade Remedies (DGTR) recommended a three-year staggered safeguard duty on imports of hot-rolled flat products of non-alloy and other alloy steel, after finding that a surge in imports was “causing and threatening to cause serious injury to the domestic industry.”

Under the final findings, the safeguard duty will be set at 12% in the first year, 11.5% in the second year, and 11% in the third year, with a provision for a mid-term review.

In a related development, the Centre has amended the anti-dumping duty framework for hot-rolled flat products of alloy and non-alloy steel imported from Vietnam to prevent a double levy after imposing a safeguard duty on the same products.

In a notification dated 30 December, the Department of Revenue under the finance ministry, said the applicable anti-dumping duty will be reduced by the amount of safeguard duty payable, if any.

The move follows the imposition of an anti-dumping duty in November, based on final findings by the DGTR, which concluded that imports from Vietnam were being dumped in India at prices below normal value, causing injury to the domestic industry and posing a threat of further harm.

The DGTR had, in its August final findings, recommended that any anti-dumping duty be adjusted against a safeguard duty if one was imposed later. Acting on this recommendation, the government has now amended the earlier notification to align with WTO-consistent practice while continuing to provide relief to domestic steelmakers without imposing overlapping duties.

Industry leaders welcomed the move, framing it as a measured step to support domestic steelmakers.

“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. 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," said Naveen Jindal, chairman of Jindal Steel and president of the Indian Steel Association.

He added that the diversion of surplus steel capacity into India by China, Japan, Korea, and Vietnam has implications for domestic capacity utilization, investment planning, and employment. “The safeguard duty helps address these pressures by restoring competitive balance and supporting the domestic steel value chain. Given ongoing global supply imbalances, further trade remedies may be considered as part of a broader policy approach to ensure sustainable growth in the steel sector.”

Steel prices have recovered from multi-year lows hit in October. Prices of steel used in automobiles and home appliances had fallen to a nine-month low, while those used in construction and infrastructure dropped to a near five-year low amid weak demand from large infrastructure projects and domestic oversupply. Prices had declined to their lowest levels so far this fiscal before beginning to stabilize.

According to data from Big Mint, domestic prices of hot-rolled coil are currently around ₹49,800 per tonne, while the landed cost of Chinese hot-rolled coil is about ₹55,400 per tonne.

“Indian mills have already raised prices by ₹1,500–2,000/tonne across categories in the last few weeks, and with January-March being a peak demand period, prices are likely to remain firm,” said Big Mint’s Goel

For the first eight months of the current financial year, India was a net importer of steel, with domestic production at 109.726 million tonnes, according to a steel ministry report accessed by Mint. Imports of finished steel stood at 4.19 million tonnes, down 36.3%.

India exported 4.18 million tonnes of finished steel during the same period, up 32.6%, while domestic consumption rose 7.3% to 105.04 million tonnes, the report said.