ABP Live Deep Dive: India has moved to strengthen trade defences around its steel sector, imposing a three-year safeguard duty of up to 12 per cent on select steel imports in a bid to curb a surge of low-priced shipments, largely originating from China.
The decision, notified through a finance ministry order published in the official government gazette on Tuesday, marks a decisive escalation in New Delhi’s efforts to protect domestic producers from what it describes as injurious and sub-standard imports.
The safeguard duty will be levied in a graded manner over three years, set at 12 per cent in the first year, easing to 11.5 per cent in the second year, and tapering to 11 per cent in the third year, reported Reuters.
The move follows months of scrutiny by trade authorities and comes against the backdrop of intensifying global trade frictions centred on Chinese steel exports.
What the Safeguard Duty Means
Safeguard duties are temporary trade measures imposed to protect domestic industries from a sudden and sharp rise in imports that cause or threaten serious injury. In this case, the Directorate General of Trade Remedies (DGTR) concluded that steel imports had witnessed a “recent, sudden, sharp and significant increase”, warranting protection for Indian manufacturers.
According to the notification, the levy will apply to a range of steel products, while excluding certain developing countries. However, major exporters such as China, Vietnam and Nepal will be subject to the duty. Specialty steel products, including stainless steel, have been kept outside the scope of the measure.
The steel ministry has consistently maintained that unchecked imports of cheap and low-quality steel could undermine the health of India’s domestic industry, which is among the largest in the world.
Why India Is Acting Now
India, the world’s second-largest crude steel producer, has been grappling with a sharp influx of inexpensive steel, particularly from China. Industry players have warned that the price undercutting has squeezed margins, distorted competition and threatened capacity utilisation at Indian plants.
Earlier this year, in April 2025, the government had imposed a temporary safeguard tariff of 12 per cent for 200 days on steel imports from foreign nations. That interim measure expired in November 2025, paving the way for a longer-term framework.
The three-year duty now notified replaces the temporary levy and provides what policymakers describe as a more stable and predictable protection regime for domestic producers.
DGTR Findings and Industry Pressure
The DGTR’s recommendation followed an investigation that found clear evidence of import-led stress in the domestic steel sector. The authority concluded that the surge in imports was not only causing injury but also posed a continuing threat if left unaddressed.
Industry bodies had been vocal in flagging the issue. The Indian Stainless Steel Development Association, for instance, had filed a petition with the DGTR in August 2025, urging the government to impose anti-dumping measures against what it termed unfairly priced steel imports.
While stainless steel has been excluded from the safeguard duty, the broader concern around cheap steel inflows has been a recurring theme in representations made by manufacturers to the government.
Global Context: Trade Frictions and China
India’s move cannot be viewed in isolation. It comes amid rising global tensions over Chinese steel exports, triggered in part by trade actions taken by the United States.
US President Donald Trump’s decision to impose import tariffs on steel has reshaped global trade flows, redirecting Chinese shipments to other markets. This diversion has prompted several countries to tighten trade defences to shield local industries.
South Korea and Vietnam, both significant players in the global steel market, have earlier this year imposed anti-dumping levies on Chinese steel products. Governments in these countries have cited concerns over market-distorting, low-priced exports flooding domestic markets.
India’s safeguard duty aligns with this broader international pushback, signalling that New Delhi is prepared to act decisively to protect strategic sectors from external shocks.
What This Means for the Steel Industry
For Indian steelmakers, the safeguard duty is expected to offer temporary relief by levelling the playing field against cheaper imports. The graded structure of the duty suggests that the government intends to provide breathing space while encouraging the industry to strengthen competitiveness over time.
At the same time, policymakers have emphasised that the objective is not to shut out imports altogether, but to prevent injury caused by sudden import surges and sub-standard products.
The safeguard duty will remain in place for three years, subject to periodic review. Its effectiveness will depend on how global trade dynamics evolve, particularly with respect to Chinese exports and policy decisions in major economies.
