India Enacts 12% Tariff on Steel Imports to Protect Domestic Industry from Influ

New Delhi, April 23, 2025 –

In a decisive action to safeguard its domestic steel sector, India has introduced a temporary 12% safeguard duty on certain steel imports, with a focus on addressing a surge in low-cost shipments from China. This measure, effective immediately for a duration of 200 days, signifies India's first significant shift in trade policy following the recent upheaval caused by U.S. President Donald Trump's global tariffs, which instigated a trade war earlier this month.
The primary objective of the tariff is to restrict the flow of inexpensive steel into the Indian market, which has pressured local mills to limit production and contemplate workforce reductions. Addressing a Growing Challenge: As the world's second-largest crude steel producer, with an annual output nearing 140 million tonnes, India faces an unprecedented influx of imported steel.

Recent government figures indicate that India has been a net importer of finished steel for the second year in a row during the 2024/25 fiscal year, with imports escalating to 9.5 million metric tons—the highest level in nine years. Notably, 78% of these imports stemmed from China, South Korea, and Japan, with China ranked as the second-largest exporter to India after South Korea. The surge of cheap steel, particularly from China—the leading global steel producer—has created significant challenges for Indian manufacturers. Smaller mills are experiencing the most severe impact, having to cut back on operations and consider layoffs due to diminishing profit margins. "The influx of surplus Chinese steel threatens to inundate major markets, including India, with low-priced goods, leading to an imbalance that could jeopardize Indian steel companies," commented an industry insider to Mint, underscoring the need for protective interventions. India's steel industry is a vital component of its economy, underpinning sectors such as construction, automotive, and infrastructure.
However, the rise of low-cost imports, often sold below production costs due to China's overcapacity, has raised concerns. The Directorate General of Trade Remedies (DGTR), part of the Ministry of Commerce and Industry, initiated an investigation in December 2024 to evaluate the repercussions of these imports. Last month, the DGTR recommended implementing a 12% tariff on non-alloy and alloy steel flat products, citing a "sudden and sharp" increase that posed a "serious threat" to domestic producers. Details and Scope of the Safeguard Duty: The Ministry of Finance announced the safeguard duty on April 21, 2025, clarifying that it will apply to five categories of steel products, including non-alloy and alloy steel flat products utilized in various industries such as fabrication, pipe-making, construction, and automotive manufacturing. The duty will be imposed on shipments priced below a range of USD 675 to USD 964 per tonne on a CIF (cost, insurance, freight) basis, protecting higher-priced imports from the tariff. Importantly, specialized steel products like Cold Rolled Grain Oriented Electrical Steel (CRGO), tinplate, stainless steel, and coated steel variants will be exempt from this measure. Characterized as a "safeguard duty" under India's trade regulations, the tariff aims to offer temporary relief to domestic producers for 200 days, unless stated otherwise. Steel Minister H.D. Kumaraswamy emphasized the significance of the measure, stating, "This initiative will provide essential support to domestic producers, particularly small and medium-sized enterprises that have faced substantial pressure from increasing imports," and adding that the tariff would ensure fair competition and protect jobs within the sector. **Industry Responses: Relief and Concerns** India's prominent steel manufacturers, including JSW Steel, Tata Steel, Steel Authority of India (SAIL), and ArcelorMittal Nippon Steel India, have largely welcomed this decision, having long pushed for restrictions on imports. "We appreciate the government's action to impose a safeguard duty on certain steel imports. This is a crucial step towards addressing the surge of unfairly priced imports into India," remarked T.V. Narendran, CEO of Tata Steel. He cautioned that unchecked imports from countries with excess capacity jeopardize domestic manufacturing, employment, and future investments.

Naveen Jindal, President of the Indian Steel Association, commended the measure as a stride towards a "stronger, Atmanirbhar Bharat" (self-reliant India), attributing this progress to Prime Minister Narendra Modi's leadership. A senior executive from a leading Indian steel mill told Reuters, "The announcement aligns with our expectations, and we now look forward to observing the impact of this measure in supporting the industry and limiting cheap imports into the country.