India is set to join the growing global trend of steel protectionism, unveiling plans for significant trade tariffs just a week after the United States imposed new duties on all steel imports. In a statement released Tuesday, India’s Ministry of Commerce proposed a temporary safeguard duty of 12% on a broad spectrum of steel products, as part of efforts to protect the domestic steel industry from an influx of foreign imports.
The proposed safeguard measures are intended to shield the domestic industry from a surge in imports that could cause long-term damage. According to the ministry, such measures are typically applied during periods of “unfavorable and unforeseen imports that threaten permanent harm to domestic industries.” India, the world’s second-largest steel producer, now joins a growing list of countries from Asia, Europe, and Latin America implementing similar tariff protections.
The global steel market is in turmoil as countries, particularly China, flood international markets with excess metal. China’s ongoing property crisis has contributed to a sharp increase in steel exports, exacerbating a global oversupply at a time of weak demand. At the same time, U.S. President Donald Trump’s recent imposition of 25% duties on steel imports is expected to divert more steel to other markets, further compounding the problem.
The proposed tariffs would remain in place for 200 days, based on an initial investigation by India’s trade authorities. A final decision will be made after a 30-day consultation period and a public hearing.
“Given the surge in new production capacity, these duties should provide some support to the domestic market,” said Shankhadeep Mukherjee, principal analyst at CRU Group, in a phone interview from Kolkata.
Indian steelmakers welcomed the news, with shares of major companies rising on Wednesday. State-owned Steel Authority of India Ltd. saw a gain of up to 5%, while Tata Steel Ltd. and Jindal Steel & Power Ltd. saw increases of 2.9% and 2.3%, respectively.
Despite reductions in production from China’s steel industry, the country continues to produce far more steel than it requires domestically, leading to a significant rise in exports, which hit a nine-year high in 2024. India has also noted the effects of various global trade measures and slowing demand, which, combined with increased steel capacity across Asia, have put additional pressure on its market.
The Indian Ministry of Commerce emphasized the urgency of the situation, stating that any delay in imposing provisional safeguard measures could result in irreversible damage to the steel sector. Government data reveals that imports of finished steel from China surged by 80% to 1.6 million tons in the first seven months of 2024.
India’s steel production has expanded rapidly in the last decade, though it still produces only about 15% of what China manufactures. With ambitious plans for future growth to support the country’s urbanization and industrialization, Indian steelmakers are eager for protection against the rising flood of imports.
If the proposed safeguard duty is implemented, it is expected to provide some relief to Indian steelmakers, many of whom had lobbied for the investigation. Several producers had requested the government impose the safeguard duty for a four-year period to ensure long-term industry stability.
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