- Provisional duty proposed on alloy, non-alloy steel imports for 200 days
- Move aims to counteract trade diversions following tariffs by US, other countries
- Excluded from developing nation exemptions, imports from China, Vietnam to drop
The Indian government has recommended the imposition of a safeguard duty on imports of non-alloy and alloy steel flat products, aiming to protect producers from a surge in imported shipments affecting the domestic market.
“Authority considers that a provisional safeguard duty of 12% for 200 days will be appropriate to eliminate the serious injury and threat thereof to the domestic industry,” the Directorate General of Trade Remedies (DGTR) under the Ministry of Commerce said in a notification published yesterday.
The move comes in response to concerns raised by domestic steel manufacturers about the increasing influx of imports of certain flat steel products, which they argue has been undercutting local prices and impacting their market share. The DGTR conducted an investigation into the matter and concluded that a surge in steel imports posed a threat to the Indian steel industry.
The 12% provisional safeguard duty aims to counter trade diversions from the US and other countries enacting protective measures. It considers the need to effectively address these diversions, the threat of serious injury to domestic producers, and the potential impact on consumer interests.
While acknowledging concerns from industries using the product under consideration, the 12% duty is deemed appropriate to mitigate the injury and threat faced by the Indian steel sector. This level aligns with the need to prevent further trade diversions, as many other countries have already implemented significant import barriers.
The duty applies to hot-rolled, cold-rolled, and coated steel coils, sheets, and plates, including HR coils, sheets, and plates, HR Plate Mill Plates, CR coils and sheets, metallic coated steel (zinc, aluminium-zinc, or zinc-aluminium-magnesium), and colour-coated steel. Specialised steel products such as electrical steel, tinplate, stainless steel, and various coated or clad steels are excluded. This measure is pending a final investigation.
Exemption for developing nations
According to Indian trade regulations, a safeguard duty cannot be imposed on imports from a developing country if that country’s import share is below 3% of India’s total imports. If multiple developing countries are involved, the combined import share of those below 3% must not exceed 9%.
In this case, China and Vietnam individually exceed the 3% threshold for the product under consideration (PUC). However, all other developing countries’ individual import shares are below 3%, and their combined share is below 9%. Therefore, imports of the PUC from all developing countries except China and Vietnam will be exempt from the safeguard duty.
Surging steel imports
India became a net steel importer of steel in 2024, with imports reaching 9.22 million tonnes (mnt), exceeding exports of 7.60 mnt, posing a major challenge to the domestic industry. Out of total steel imports India’s HRC imports were 4.48 mnt, a surge of 46% in CY’24 against 3.07 mnt in CY’23.
M-o-m, steel imports rose by 12% to reach 740,000 t in January 2025 compared with over 660,000 t in December 2024, as per provisional data available with BigMint.
Major steel exporting countries
South Korea topped the list of steel exporters to India with 2.86 mnt (2.50 mnt in CY’23), up 14% y-o-y. China came a close second with 2.76 mnt, but interestingly these volumes were up a hefty 64% from 2023 levels of 1.69 mnt, bringing its share of 30% in total imports almost on par with Korea’s 31%.
Imports from Japan grew an alarming 97% y-o-y to 1.81 mnt (0.92 mnt) while surprisingly Vietnamese shipments fell by 34% in this period to 0.68 mnt (1.03 mnt in CY’23).
Price-based exemptions
Recognising that the primary injury to the domestic industry stems from lower-priced imports across diverse product categories, DGTR recommends a price-based exemption to the proposed safeguard duty.
Specifically, imports of hot-rolled coils, sheets and plates, HR plate mill plates, cold-rolled coils and sheets, metallic-coated steel, and colour-coated steel will be exempt from the duty if their CIF import prices meet the specified thresholds: $675/t, $695/t, $824/t, $861/t, and $964/t respectively. This measure aims to protect domestic producers while allowing imports of higher-value products to continue.
After publishing its preliminary findings, the Authority will proceed with the following steps: Firstly, a 30-day window will be provided for all stakeholders to submit comments on the findings, which will be reviewed for relevance in the final determination.
Secondly, an oral hearing will be scheduled, with the date to be announced on the DGTR website, prior to the final decision. Third, the Authority will conduct any necessary additional verification of the information provided by the interested parties.
Outlook
The provisional safeguard duty on flat steel imports is likely to significantly reshape the Indian steel market. This measure, driven by a surge in imports, particularly of HRCs, will likely lead to increased domestic steel prices, benefiting local producers while potentially impacting downstream industries reliant on imported materials.
Furthermore, the price-based exemptions aim to mitigate the impact on higher-value imports, but the overall effect will be a reduction in import volumes, especially from China and Vietnam that do not benefit from developing nation exemptions.
The net result is likely to be positive for the domestic steel producers but with potential inflationary pressures for steel end-users and a shift in import sourcing dynamics.
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