12% safeguard duty imposed on certain steel products

India on Monday imposed a 12 per cent provisional safeguard duty for 200 days on five steel product categories, including hot rolled coils, sheets and plates, to protect domestic players from surge in imports.

Photograph: Wolfgang Rattay/Reuters

The decision follows a recommendation for the same by the Commerce Ministry’s investigation arm DGTR. Last month, the DGTR suggested to impose the duty.

“…the Central Government after considering the said findings of the Director General (Trade Remedies), hereby imposes…a provisional safeguard duty at the rate of twelve per cent ad valorem,” according to a notification of the Department of Revenue.

It said that the safeguard duty imposed under this notification shall be effective for a period of 200 days (unless revoked, superseded or amended earlier) from the date of publication of this notification.

The government has set the import prices between $675 per tonne to $964 per tonne for the five steel product categories. Any shipment imported below these import prices would attract the safeguard duty.

The safeguard duty shall not be imposed on the product categories when imported into India at or above the speficied import price on CIF (cost insurance freight) basis, according to the notification.

The product categories are Hot Rolled coils, sheets and plates; Hot Rolled Plate Mill Plates; Cold Rolled Coils and Sheets; Metallic Coated Steel Coils and Sheets; and Colour Coated coils and sheets, whether or not profiled.

Last year in December, the Directorate General of Trade Remedies (DGTR) started the investigation into the sudden surge in imports of ‘Non-Alloy and Alloy Steel Flat Products’, used in various industries, including fabrication, pipe making, construction, capital goods, auto, tractors, bicycles, and electrical panels.

The investigations were conducted following a complaint from the Indian Steel Association on behalf of its members including ArcelorMittal Nippon Steel India; AMNS Khopoli; JSW Steel; JSW Steel Coated Products; Bhushan Power & Steel; Jindal Steel and Power; and Steel Authority of India Limited.

The directorate in its probe had found that there is a recent, sudden, sharp and significant increase in the imports of these products into India, causing and threatening to cause serious injury to the domestic industry/producers.

The directorate has said in a notification dated March 18, 2025 that there exist critical circumstances, where any delay in application of provisional safeguard measures would cause damage which would be difficult to repair.

According to the industry, the existence of significant excess capacity far exceeding domestic consumption in China, Japan and South Korea have arisen due to slowing demand in those countries.

Import of these products increased from 2.293 million tonnes during 2021-22 to 6.612 million tonnes during the period of investigation (October 2023 to September 2024, and the three preceding fiscal years – 2021-24).

The imports have increased from countries including China, Japan, Korea, and Vietnam.

The DGTR had noted that the objective of the duty is to protect the Indian domestic industry against the surge of imports.

While some big domestic steel makers are advocating for imposition of the duty, the user industry is strongly against it as the duty would push raw material prices, impacting their competitiveness.

MSME exporters from the engineering sector have stated that any move to impose additional duties on steel imports would make domestic products uncompetitive and impact the country’s outbound shipments from the sector.

FIEO (Federation of Indian Export Organisations) President S C Ralhan said that the imposition of the duty would benefit only 5-6 domestic companies and it will hurt engineering exports from India because the US has already imposed a 25 per cent tariff on steel and aluminum.

“Due to this, steel prices will rise to Rs 6,000 per tonne from the current about Rs 5,400 per tonne. The government reconsiders its decision,” Ralhan said.

Safeguard measures in the form of duty or quantitative restrictions are trade remedies available to the World Trade Organization member-countries.

They are imposed to provide a level-playing field to domestic players in case of sudden and significant increase in imports of a product.

The measure is used when imports of a particular product increase unexpectedly to a point that they cause or threaten to cause serious injury to domestic producers.

These duties are applicable against all the countries with uniform rate of duty unlike the anti-dumping duties.

Welcoming the safeguard duties, Union Steel Minister H D Kumaraswamy said, “The move will provide critical relief to domestic producers, especially small and medium-scale enterprises, who have faced immense pressure from rising imports.

“The safeguard duty will help restore market stability and reinforce the confidence of the domestic industry.”

Indian Steel Association said the import duty will protect Indian manufacturers from unfair imports.

“We welcome the government’s decisive move to impose a 12 per cent safeguard duty on certain steel products.

“This important step will protect Indian manufacturers from unfair imports, boost domestic production, and accelerate our journey towards a stronger, Atmanirbhar Bharat.

“We thank Hon’ble Prime Minister Shri Narendra Modi for his visionary leadership and steadfast support to the steel sector,” Naveen Jindal, president, Indian Steel Association, said in a statement.