In a significant move to protect the domestic steel industry, the Government of India, on Monday, April 21, 2025, officially imposed a 12% provisional safeguard duty on the import of five key categories of steel products. This duty, effective for a period of 200 days, is intended to address the sharp surge in steel imports and provide temporary relief to domestic producers.
Background and Government Notification
The decision follows a formal recommendation from the Directorate General of Trade Remedies (DGTR) — the investigative arm of the Ministry of Commerce and Industry. A notification issued by the Department of Revenue confirms that a 12% ad valorem safeguard duty will be levied on specified steel products, effective from the date of publication.
The duty is being imposed in accordance with trade safeguard mechanisms permitted under World Trade Organization (WTO) rules. These measures are designed to ensure a level playing field for domestic producers in the event of an abnormal increase in imports.
Steel Product Categories Under Duty
The safeguard duty will apply to the following non-alloy and alloy steel flat products:
- Hot Rolled Coils, Sheets, and Plates
- Hot Rolled Plate Mill Plates
- Cold Rolled Coils and Sheets
- Metallic Coated Steel Coils and Sheets
- Colour Coated Coils and Sheets (whether or not profiled)
According to the notification, the duty will not be applicable if these products are imported at or above the prescribed CIF (Cost, Insurance, and Freight) import prices, which range between $675 and $964 per metric tonne depending on the product category.
Reason for Imposition
The DGTR initiated an investigation in December 2024 after receiving a complaint from the Indian Steel Association (ISA), supported by major industry players such as JSW Steel, Tata Steel, ArcelorMittal Nippon Steel India, Steel Authority of India Limited (SAIL), and others.
During its investigation, the DGTR observed a recent, sharp, and significant rise in steel imports, which increased from 2.29 million tonnes in FY 2021–22 to 6.61 million tonnes during the period of investigation (October 2023 – September 2024). This surge, primarily from countries such as China, Japan, South Korea, and Vietnam, was found to be causing or threatening to cause serious injury to the Indian steel industry.
The investigation concluded that critical circumstances exist, and any delay in applying provisional measures could result in irreparable damage to the domestic sector.
Industry Reactions
Support from Domestic Producers
Welcoming the move, Union Steel Minister H.D. Kumaraswamy stated:
“The safeguard duty will provide critical relief to domestic producers, especially small and medium enterprises (SMEs), who are under severe pressure due to rising imports. This step will help stabilize the market and restore confidence in the domestic steel ecosystem.”
The Indian Steel Association also lauded the government’s decision, highlighting its importance for a self-reliant India (Atmanirbhar Bharat).
“We thank the Hon’ble Prime Minister for his visionary leadership. This duty will protect Indian manufacturers from unfair imports and boost domestic production,” said Naveen Jindal, President, ISA.
Opposition from User Industries
However, the decision has faced opposition from downstream industries. Exporters and MSMEs in the engineering sector, represented by the Federation of Indian Export Organisations (FIEO), have expressed concern that the safeguard duty could increase raw material costs, making Indian goods less competitive in the global market.
“Steel prices may rise from ₹5,400 to ₹6,000 per tonne. The government must reconsider this decision as it benefits only a few large firms,” said S.C. Ralhan, President of FIEO.
Exporters have warned that the duty, coupled with existing tariffs in markets like the United States (25% on steel and aluminium), could adversely impact engineering exports from India.
Conclusion
The imposition of a 12% provisional safeguard duty reflects the Indian government’s attempt to balance domestic industrial protection with global trade commitments. While the duty aims to protect Indian steel producers from the effects of a sudden import surge, it also presents challenges for user industries that rely on competitively priced steel for manufacturing and exports.
The effectiveness and future of this safeguard measure will depend on the results of the stakeholder consultation process and the government’s final decision after 200 days.
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