In an effort to shield the domestic steel sector from an increase in low-cost imports, the Indian government has formally announced the application of a safeguard levy on specific types of imported steel flat goods. The Ministry of Finance has announced that the charge would be in effect for three years, starting in April 2025 and lasting until 2028.
The safeguard duty will be between 11% and 12% over the course of three years, according to publications that cite Reuters. The first year’s levy will be 12%, the second year’s will be 11.5%, and the third year’s will be 11%. The goal of this tiered structure is to provide local producers quick relief while enabling progressive market adjustment over time.
Applicability and coverage particular to a nation
Imports of certain steel flat goods from nations including China, Vietnam, and Nepal will be subject to the safeguard tariff. These three countries have been specifically included under the levy’s scope because of their substantial percentage of India’s steel imports, even if the legislation exempts imports from several developing countries.
The government has made it clear that stainless steel and other specialized steel goods are exempt from the levy. This exception guarantees that specialized applications and essential industrial requirements won’t be negatively impacted. The Ministry of Steel has continuously argued that unrestricted imports of inexpensive, subpar steel can jeopardize the long-term viability of India’s steel industry and constitute a major danger to native manufacturers.
Notably, in April, the government temporarily reduced import demand by imposing a 12% safeguard tariff for 200 days. Based on the results of a thorough study, the most recent notification formalizes the protective framework for a longer period of time.
DGTR guidelines and injury evaluation
The Directorate General of Trade Remedies’ (DGTR) recommendations were followed in the decision to apply the three-year safeguard duty. Following a thorough inquiry, the DGTR noted a “recent, sudden, sharp, and significant increase in imports” of the steel items in question.
The results show that the increase in imports has seriously harmed the domestic steel sector and continues to do so. The DGTR came to the conclusion that Indian steel producers may experience financial strain, decreased capacity utilization, and a decline in their ability to compete in both local and international markets if corrective action was not taken.
According to the finance ministry’s directive, products imported into India under tariff categories 7208, 7209, 7210, 7211, 7212, 7225, and 7226 of the First Schedule to the Customs Tariff Act will be subject to the safeguard charge.
Sector performance, supply, and demand
Despite a difficult global climate, the Reserve Bank of India observed that the Indian economy showed great resilience throughout 2025. Strong domestic demand, especially rural consumption, supported by declining inflation and a rebound in fixed investment, was the main driver of growth.
On the supply side, manufacturing showed indications of recovery following previous underperformance, albeit some deceleration developed near the end of the year, while the services sector continued to grow strongly. Higher kharif output and stable foodgrain inventories helped keep food price pressures under control, and agricultural prospects remained promising.
The framework of global commerce and market reaction
The safeguard measure is implemented in response to growing trade tensions in the steel industry worldwide. President Donald Trump’s import tariffs have increased scrutiny of Chinese steel shipments, leading nations like South Korea and Vietnam to enact anti dumping and protective measures earlier this year.
The news immediately improved local steel supplies in India. In the trading session that followed the announcement, shares of major steel makers saw increases ranging from 2% to 4%. With increases of almost 3.5% and 2.7%, respectively, Tata Steel and JSW Steel surpassed the benchmark Nifty 50 index, which saw just a little increase.
Conclusion
The Indian government’s decisive policy intervention to protect domestic businesses from unfair import competition is the introduction of a safeguard levy on certain imports of steel flat products. The move intends to stabilize the steel sector, encourage local capacity, and maintain fair market conditions by striking a balance between protection and progressive duty reduction. It also aligns India’s trade policy with global changes in the steel industry.
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