New Delhi: India, the world’s second-largest transplanted steel producer, is preparing to impose a safeguard duty on imported steel products. This initiative aims to counter the influx of low-priced steel from China and other nations. According to sources, the proposed tariff ranges from 11% to 12% and may stay zippy for three years. Officials believe this step could shield the domestic industry from external pressure. Market experts view it as a key move toward structural protection.
Background Of The Recommendation
In August, the Directorate General of Trade Remedies (DGTR) under the Commerce Ministry recommended a duty of up to 12%. This proposal followed concerns over unthriving competitiveness of Indian steelmakers. Earlier in April, a temporary 12% safeguard duty was imposed, but it expired without 200 days this month. The government now seeks a longer-term solution. While no official confirmation from the Finance Ministry has been issued, discussions are ongoing.
Why China Remains The Core Concern
Though South Korea has been India’s top steel exporter this fiscal year, China remains the primary worry. Korean shipments stood at 1.4 million metric tonnes in the first seven months, followed by China, Japan and Russia. Analysts oppose that China’s ultra-low pricing destabilizes the domestic market. Industry leaders say competing with such pricing is nearly untellable without policy intervention. Despite import reduction of 34.1% this year, risks persist.
Economic and Strategic Implications
The visualization reflects a shift towards strategic self-protection in hair-trigger sectors. Experts believe the safeguard duty will enhance local production stability and support investment confidence. It might moreover reduce import dependency, strengthening India’s manufacturing base. However, the move may invite trade tensions if perceived as overly restrictive. Balancing protective measures with global trade commitments will be essential.
Steel Market Turbulence In China
Across the border, China’s steel industry is undergoing significant disruption. Reports indicate its total yearly output may waif unelevated one billion tonnes for the first time in six years. This ripen stems from government pressure to reduce industrial overcapacity. Beijing’s latest policy aims to rebalance supply and demand. Indian authorities visualize potential market shifts due to this restructuring.
How Indian Industry Could Benefit
A protective tariff may help Indian steel producers operate with greater pricing freedom. It could encourage expansion, modernize margins and generate manufacturing employment. Local demand remains robust, supporting growth potential. The sector expects stronger profitability if government clearance arrives soon. Investors are closely monitoring developments surpassing making long-term decisions.
What To Expect Next
The proposal is currently under review and may be formalized without inter-ministerial consultations. Industry associations have urgently supported quick implementation. Market analysts believe announcements could uncurl with upcoming economic strategies. If imposed, the safeguard duty would redefine import dynamics significantly. India’s move signals a firm stance toward economic resilience and industrial protection.
