India Imposes Three-Year Safeguard Duty on Steel Imports to Counter Cheap Inflows

India has imposed a safeguard import duty of 11–12 per cent on select steel products for three years, a measure aimed at checking the surge of low-priced steel imports, particularly from China, that has put pressure on domestic manufacturers.

According to a notification issued by the Ministry of Finance and published in the official government gazette, the safeguard duty will be implemented in a phased manner. The tariff will stand at 12 per cent in the first year, be reduced to 11.5 per cent in the second year, and further lowered to 11 per cent in the third year, ending in April 2028.

---

Why India Took the Step

The government’s decision follows mounting concerns over a sharp rise in cheap steel imports, which officials believe may be the result of dumping practices. In its order, the government noted that a “recent, sudden, sharp and significant increase” in imports of certain steel products has already caused, and continues to threaten, serious injury to domestic producers.

Based on these findings, the Centre said it was necessary to impose a safeguard duty to provide immediate relief to the domestic steel industry while allowing it time to adjust to competitive pressures.

The move follows recommendations made by the Director General (Trade Remedies), the investigative arm of the commerce ministry that examines cases related to unfair trade practices.

---

Countries and Products Covered

While the safeguard duty applies broadly to certain categories of steel imports, the order exempts supplies from some developing countries in line with World Trade Organization (WTO) norms. However, imports originating from China, Vietnam and Nepal will attract the duty.

The tariff will not apply to specialised steel products, including stainless steel, which are considered critical inputs for certain industries and are not produced in sufficient quantities domestically.

---

Phased Duty Structure

Under the notification, the safeguard duty will be levied as follows:

• 12 per cent ad valorem on imports made between April 21, 2025, and April 20, 2026

• 11.5 per cent ad valorem on imports between April 21, 2026, and April 20, 2027

• 11 per cent ad valorem on imports between April 21, 2027, and April 20, 2028

The gradual reduction is intended to balance industry protection with market competition over time.

---

Background: Interim Duty Already in Place

In April this year, the government had imposed an interim safeguard duty of 12 per cent for 200 days on the same category of steel products to provide immediate protection while a detailed investigation was underway. The latest notification converts that temporary measure into a longer-term safeguard mechanism.

---

Industry Impact and Broader Implications

Domestic steel producers have welcomed the move, arguing that unchecked imports—especially from China, which has excess production capacity—distort prices and threaten jobs and investments in India’s steel sector.

Trade experts, however, caution that while safeguard duties are permitted under WTO rules, India will need to ensure that the measure remains time-bound and proportionate to avoid retaliation or disputes with trading partners.

For now, the government says the duty is a necessary step to stabilise the domestic steel industry while maintaining a predictable and rules-based trade regime.