India to impose temporary 12% safeguard duty on steel

India plans to implement a temporary 12% safeguard duty on a wide array of steel products to shield its domestic industry from a surge in imports, especially from China. This decision mirrors actions taken by other countries and follows the recent imposition of tariffs by the United States.

India is set to join a global trend of steel protectionism by proposing a 12% temporary safeguard duty on a wide range of steel imports. This move follows U.S. President Donald Trump’s recent imposition of a 25% tariff on all steel imports, which has raised fears of diverted steel supplies from major exporters like China. India’s Commerce Ministry stated that the safeguard measures are designed to protect the domestic industry from unforeseen, unfavorable import surges that could cause long-term harm.

India, the world’s second-largest steel producer, is reacting to a global oversupply of steel, largely fueled by China’s production. Despite reducing output, China’s ongoing property crisis has caused steel exports to rise dramatically, reaching a nine-year high in 2024. As demand slows globally and steel capacity continues to expand across Asia, India has seen a significant increase in steel imports — particularly from China. Finished steel imports from China rose by 80% to 1.6 million tons in the first seven months of 2024, according to official data.

The proposed Indian tariffs would be in place for 200 days, pending a final decision after a 30-day consultation and public hearing. The measure is expected to offer short-term relief to Indian steelmakers, many of whom had pushed for government intervention through the Indian Steel Association. While they had requested a longer four-year safeguard period, this temporary duty marks an initial step toward protecting domestic producers.

ICRA Vice-President Ritabrata Ghosh stated that leading flat steel manufacturers such as JSW Steel, Tata Steel, SAIL, and ArcelorMittal Nippon Steel India (AM/NS India) are likely to gain the most from the imposition of the safeguard duty.

Although India’s steel output is only about 15% of China’s, the country’s steel industry has grown rapidly in recent years and has ambitious plans to expand further to support urbanization and industrial growth.