In a significant move to shield its domestic steel industry, the Government of India has officially rolled out a new safeguard duty on specific steel imports. The measure, announced on Tuesday, will remain in effect for a period of three years and is aimed at countering a flood of low-cost overseas supplies.
Details of the Three-Year Tariff Plan
According to a notification issued by the finance ministry, the safeguard duty structure is set on a declining scale. The duty will be 12% in the first year, reduced to 11.5% in the second year, and will further fall to 11% in the third and final year. This decision follows a comprehensive investigation by the Directorate General of Trade Remedies (DGTR) into import trends and their damaging impact on local producers.
The DGTR's probe concluded that there was a "recent, sudden, sharp and significant increase in imports" which was "causing and threatening to cause serious injury to the domestic industry." This finding directly prompted the recommendation for the three-year protective tariff.
Scope, Exemptions, and Global Context
The levy will apply to shipments of the specified steel products originating from several countries, including China, Vietnam, and Nepal. However, in line with trade norms, imports from certain developing nations have been exempted from this safeguard measure. It is also clarified that specialty steel products like stainless steel will not be covered under this duty.
This latest action builds upon a temporary safeguard measure implemented earlier. In April, the government had imposed a provisional 200-day duty of 12% on similar steel items. Officials from the federal steel ministry have consistently voiced concerns that unchecked inflows of cheap and often sub-standard steel pose a significant threat to the health of India's domestic steel sector, necessitating such protective steps.
A Response to Global Trade Pressures
The Indian government's decision arrives amidst heightened global trade tensions within the steel market. Policies like the import tariffs on steel enacted by former US President Donald Trump have intensified global scrutiny on Chinese steel exports. This has led other nations, including South Korea and Vietnam, to introduce their own anti-dumping duties earlier this year, reflecting a broader trend of nations seeking to fortify their domestic industrial bases against market distortions.
By enacting this structured, three-year safeguard duty, India aims to provide its domestic steel manufacturers with a more predictable and protected environment to compete and grow, insulating them from volatile and surging imports.
