India’s Steel Industry Backs 12% Safeguard Duty on Imports

Post by : Meena Rani

India’s steel industry has expressed confidence that the recently imposed 12% safeguard duty on certain flat steel products will help protect domestic producers from the threat of injury and from the dumping of cheaper imports into the country. Industry leaders believe the measure, though lower than what they had initially hoped for, is strong enough to provide support during challenging global market conditions.

Duty Seen as Adequate for Now

The safeguard duty was recommended by the Directorate General of Trade Remedies (DGTR) under the Ministry of Commerce. It is to be applied for three years, starting with 12% in the first year, then gradually reducing to 11.5% in the second year, and 11% in the third.

A provisional duty of 12% had already been in place for 200 days from April this year, following preliminary findings that showed a sudden and sharp increase in steel imports that threatened domestic manufacturers.

Naveen Jindal, president of the Indian Steel Alliance (ISA), said that while industry players had expected a higher level of protection—around 25%—the 12% safeguard duty is still sufficient for the current situation. He explained that if global steel prices fall further and cheaper imports increase, the industry would not hesitate to approach the government again for further adjustments.

“We would have liked the duty protection to be higher, but if the government has decided 12% after careful study, it is enough for now,” Jindal said at the India Steel Conclave. “If the situation worsens, we will once again request protection from the authorities.”

Global Tariffs and Pressure on Prices

The global steel trade is under pressure due to high tariffs in major importing countries like the United States. The US has imposed duties of up to 50% on Indian steel, which has stopped most exports from India to that market.

“All the steel that was earlier being exported to the US has stopped completely. Producers are now searching for other destinations to sell, and this has led to more supply in international markets, which has pulled prices down,” Jindal noted.

This global oversupply has affected India as well. Despite the safeguard duty, steel prices in the country have not risen. Instead, benchmark hot-rolled coil (HRC) prices fell from ₹52,900 per tonne in April 2025 to ₹48,500 per tonne by July, and continued to decline further in August.

India’s Production and Consumption Balance

India’s steel industry remains one of the largest in the world. The country produced 146.56 million tonnes of finished steel in FY25, including 54.12 million tonnes of hot-rolled coils. At the same time, total steel consumption reached 152 million tonnes, outpacing production. This shows India is a large consumer-driven market, relying on imports mainly for special grades of steel not produced locally.

Imports of HRC have risen sharply over the past two years. According to industry data, imports increased from 1.87 million tonnes in FY23 to 3.55 million tonnes in FY24, and further to 4.07 million tonnes in FY25. Most of these imports came from South Korea and Japan.

Industry officials explained that the safeguard duty is not meant to increase domestic prices artificially. The flat steel segment in India has six large producers and many smaller players, creating strong competition. With so many competitors, no single company has the power to control pricing. Instead, domestic steel prices remain closely aligned with global price movements.

Demand Outlook for Indian Steel

Despite global price pressure, demand in the domestic market has been encouraging. Jindal noted that steel demand in FY25 grew in double digits, even though floods and heavy rains disrupted construction activity in several parts of the country during the monsoon season.

“We are confident that demand will continue to grow strongly. The temporary slowdown caused by the floods will end soon, and we expect the market to recover next month,” he said. “By the end of the financial year, we should still see double-digit growth in demand.”

This positive demand outlook is supported by strong infrastructure projects, urban housing developments, and government-led initiatives like highways, railways, and renewable energy expansion, all of which depend heavily on steel.

Challenges from Global Surplus

One of the biggest risks for India’s steel industry comes from global oversupply. According to data from the Organisation for Economic Co-operation and Development (OECD), global steelmaking capacity exceeded demand by around 600 million tonnes in 2024. This excess is projected to widen further to about 720 million tonnes by 2027.

Analysts warn that this surplus, combined with high tariffs in countries like the US, could result in large volumes of steel being redirected to markets such as India, where protective duties are relatively lower. This situation could put pressure on domestic producers despite the current safeguard duty.

Industry’s Confidence in Regulatory Support

Jindal highlighted the role of the DGTR in carefully assessing the level of injury to domestic producers before making recommendations. “The DGTR studies the situation in detail. They consider the type of injury the domestic industry is facing and then arrive at a decision. We respect that process and are confident that if any problem arises in the future, the authorities will take the right steps,” he said.

Industry leaders believe that with the safeguard duty in place, combined with strong domestic demand, Indian steelmakers can remain competitive and withstand short-term challenges caused by global supply imbalances.

For now, India’s steel industry is prepared to operate under the protection of the 12% safeguard duty, even as global uncertainties remain. The balance between imports and domestic demand will be closely watched in the coming years. With infrastructure growth boosting consumption and government monitoring the situation, the steel industry feels better positioned to handle the challenges of global oversupply and shifting trade flows.

India steel industry, safeguard duty, steel imports, hot-rolled coil