- Safeguard duty of 11-12% to be imposed over next 3 years
- Surging imports found to be causing serious injury to industry
The Directorate General of Trade Remedies (DGTR) has released its final findings in the safeguard investigation on imports of flat rolled steel products, recommending staggered duties of 11-12% for three years. The investigation, initiated in 2024, established that rising imports were causing “serious injury” to domestic producers and safeguard duties were required to provide relief.
Initially, in April, the Indian government had announced the imposition of a provisional safeguard duty of 12% ad valorem on imports of specific “non-alloy and alloy steel flat products.”
Background, scope
The safeguard probe covered imports of hot-rolled flat products of alloy or non-alloy steel, excluding stainless steel, with a thickness of up to 25 mm and a width of up to 2,100 mm, in coils or cut lengths. These products are widely used across sectors such as automotive, construction, oil and gas, engineering, and capital goods. Moreover, the Authority has considered the period from 1 October 2023 to 30 September 2024 as the period of investigation (POI). For injury analysis, the timeframe taken into account includes FY’21-22, FY’22-23, FY’23-24, along with the POI.
The petition, filed by the Indian Steel Association on behalf of major producers including JSW Steel and ArcelorMittal Nippon Steel India, argued that surging imports were undercutting domestic prices, reducing capacity utilisation, and squeezing profits. Other steelmakers such as Tata Steel, SAIL, Jindal Steel and Power and Bhushan Power and Steel supported the petition, together representing well over 80% of domestic production capacity.
Findings
DGTR’s analysis confirmed that imports had increased significantly during the investigation period, with notable shipments from South Korea, Japan, China, and Vietnam. It found clear evidence of price undercutting and price suppression in the Indian market, which resulted in financial stress for domestic mills. The report highlighted falling profits, reduced return on investment, and declining cash flow as signs of serious injury.
The authority did not accept requests from importers to exclude certain steel variants, such as pickled and oiled coils or narrow-width products. It explained that granting such exclusions might open avenues for circumvention, as minor changes in product specifications could be used to bypass the duties.
Recommendations
Based on its findings, DGTR has recommended safeguard duties on flat steel imports for three years, with rates tapering gradually in line with World Trade Organization (WTO) guidelines:
- 12% in the first year
- 11.5% in the second year
- 11% in the third year
The duties would apply across exporting countries and are designed to restore fair competition while allowing Indian producers space to recover. DGTR also clarified that safeguard duties can coexist with anti-dumping measures, though adjustments will be made to avoid double protection.
The recommendation now moves to the Ministry of Finance, which will take the final decision on implementation. If approved, the safeguard duties will remain in place for up to three years, with a gradual phase-out schedule, as per global trade rules under the WTO framework.
Import price thresholds for exemptions
The notification also establishes specific import price thresholds on a Cost, Insurance, and Freight (CIF) basis, above which the safeguard duty will not be imposed.
Implications for industry
The outcome is expected to provide much-needed relief to Indian steelmakers, who have faced sustained pressure from low-priced imports, particularly in high-grade segments not widely produced domestically. Industry participants believe the duties will help stabilise domestic prices, improve capacity utilisation, and strengthen balance sheets at a time when global steel markets remain volatile.
However, for importers and downstream industries reliant on specialised steel grades, the safeguard duties could translate into higher landed costs. Buyers in sectors such as automotive, engineering, and construction may need to reassess procurement strategies if overseas supply becomes less competitive.
India’s import volume in H1CY’25
India’s steel imports fell by 14% to 4.4 mnt in H1CY’25 against 5.2 mnt in H1CY’24.
Product-wise imports: Finished flat (carbon steel) imports fell 24% y-o-y to 3.0 mnt, led by a 37% drop in HRC arrivals to 1.2 mnt. Flats remained the mainstay of imports, at a 68% share of the total, with HRCs making up 27% of overall volumes.
Meanwhile, semi-finished imports surged twofold to 0.42 mnt due to imports of slabs from a steelmaker’s own overseas unit.
Arrivals of longs increased 32% y-o-y to 0.18 mnt (4% share).
Country-wise importers: Among the primary exporters, China and Japan saw volumes contract by 46% and 41% y-o-y to 0.83 mnt and 0.56 mnt, respectively. However, South Korea recorded a modest 8% decrease to 1.29 mnt.
Outlook
In the near term, market activity is expected to remain cautious as stakeholders await the Finance Ministry’s final decision. If safeguard duties are implemented, domestic mills may secure greater pricing leverage, though a lasting recovery will depend on stronger demand. The move also highlights India’s proactive use of trade measures to shield strategic industries, while still aiming to maintain access to competitively priced raw materials for its expanding manufacturing and infrastructure sectors.
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