New Delhi, April 23, 2025 – In a significant move to protect its domestic steel industry, India has imposed a temporary 12% safeguard duty on certain steel imports, primarily targeting a surge of low-cost shipments from China. The decision, effective immediately for 200 days, marks India’s first major trade policy shift since U.S. President Donald Trump’s sweeping global tariffs sparked a trade war earlier this month. The tariff aims to curb the influx of cheap steel flooding the Indian market, which has forced local mills to scale back operations and consider job cuts.
A Response to a Growing Crisis
India, the world’s second-largest producer of crude steel with an annual output of approximately 140 million tonnes, has been grappling with a record-high influx of imported steel. According to provisional government data, India became a net importer of finished steel for the second consecutive year in the 2024/25 fiscal year, with imports soaring to 9.5 million metric tons—the highest in nine years. Of these, 78% originated from China, South Korea, and Japan, with China alone accounting for a significant share as the second-largest exporter to India after South Korea.
The flood of inexpensive steel, particularly from China—the world’s top steel producer—has placed immense pressure on India’s domestic manufacturers. Smaller mills have been hit hardest, forced to reduce operations and contemplate layoffs due to shrinking profit margins. “The surplus Chinese steel threatens to flood major markets, including India, with cheap products, creating an imbalance that could affect Indian steel companies,” an industry executive told Mint, highlighting the urgency of protective measures.
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India’s steel industry, a critical pillar of its economy, supports sectors like construction, automotive, and infrastructure. However, the influx of low-priced imports, often sold below production costs due to China’s overcapacity, has raised alarms. The Directorate General of Trade Remedies (DGTR), under the Ministry of Commerce and Industry, launched an investigation in December 2024 to assess the impact of these imports. Last month, the DGTR recommended a 12% tariff on non-alloy and alloy steel flat products, citing a “sudden and sharp” surge that posed a “serious threat” to domestic producers.
The Safeguard Duty: Details and Scope
The Ministry of Finance announced the safeguard duty on April 21, 2025, specifying that it would apply to five categories of steel products, including non-alloy and alloy steel flat products used in industries such as fabrication, pipe-making, construction, and automotive manufacturing. The duty will be levied on shipments imported below a price range of USD 675 to USD 964 per tonne on a CIF (cost, insurance, freight) basis, ensuring that higher-priced imports remain unaffected. Notably, specialized steel items like Cold Rolled Grain Oriented Electrical Steel (CRGO), tinplate, stainless steel, and coated steel variants are excluded from the measure.
The tariff, described as a “safeguard duty” under India’s trade regulations, is designed to provide temporary relief to domestic producers for 200 days, unless revoked, amended, or extended earlier. Steel Minister H.D. Kumaraswamy emphasized the measure’s importance, stating, “This move will provide critical relief to domestic producers, especially small and medium-scale enterprises, who have faced immense pressure from rising imports.” He added that the tariff would ensure fair competition and safeguard jobs in the sector.
Industry Reactions: Relief and Concerns
The decision has been broadly welcomed by India’s leading steelmakers, including JSW Steel, Tata Steel, Steel Authority of India (SAIL), and ArcelorMittal Nippon Steel India, who have long advocated for curbs on imports. “We welcome the government’s decision to impose a safeguard duty on certain steel imports. This is a critical step in addressing the surge of unfairly priced imports to India,” said T.V. Narendran, CEO of Tata Steel. He warned that unchecked imports from countries with excess capacity threaten domestic manufacturing, employment, and future investments.
Naveen Jindal, President of the Indian Steel Association, hailed the move as a step toward a “stronger, Atmanirbhar Bharat” (self-reliant India), crediting Prime Minister Narendra Modi’s leadership. A senior executive at a leading Indian steel mill told Reuters, “The decision is along expected lines, and we will now wait to see how this measure supports the industry and restricts cheap imports into the country.”
However, not all reactions were uniformly positive. Downstream industries, such as automotive, shipbuilding, and construction, expressed concerns about potential cost increases. Pankaj Chadha, Chairman of the Engineering Export Promotion Council of India (EEPC India), cautioned that the tariff could lead to price hikes and supply disruptions for micro, small, and medium enterprises (MSMEs). He urged the government to adopt measures like country-specific quotas and export parity pricing to ensure affordability for India’s engineering and manufacturing sectors.
Global Context: A Ripple Effect of U.S. Tariffs
India’s tariff comes amid heightened global trade tensions, exacerbated by U.S. President Donald Trump’s imposition of a 10% tariff on all countries and targeted duties of up to 25% on steel and aluminum, effective April 5, 2025. These measures have disrupted global steel trade routes, redirecting Chinese exports to markets like India and Vietnam. The Indian Steel Association noted that between 2019 and 2023, 129 trade remedy measures were imposed globally against steel imports, reflecting a broader trend of protectionism.
“The world is impacted by Chinese imports, whether directly or indirectly,” a senior Indian steel executive remarked, underscoring the global nature of the challenge. China’s steel production far exceeds its domestic demand, leading to aggressive exporting at below-market prices—a practice critics describe as “dumping.” India’s 12% tariff aligns it with countries like Saudi Arabia, Vietnam, and Chile, which have also introduced measures to limit cheap steel inflows.
India-China Relations and BRICS Dynamics
The tariff adds a layer of complexity to India-China relations, already strained by a 2020 border clash and ongoing trade imbalances. While both nations are members of the BRICS economic alliance, India has tightened scrutiny of Chinese investments and exports in recent years. However, some experts see potential for cooperation. Guo Xuetang, director of the Research Centre for South Asia and Indian Ocean Studies at Shanghai University, argued that India’s tariff is unlikely to harm bilateral ties significantly, as India still relies on cost-effective Chinese steel for infrastructure projects.
Swaran Singh, a professor at Jawaharlal Nehru University, suggested that U.S. tariffs could create an opportunity for India and China to deepen economic cooperation through forums like BRICS and the G20. “India and China should coordinate their efforts to counter this hegemonic tariff,” he said, advocating for reduced trade barriers and joint infrastructure projects.
Social Media Buzz and Public Sentiment
On social media platform X, the tariff announcement sparked lively discussions. Users praised India’s move as a necessary defense against Chinese dumping. “Smart move by India to slap a 12% tariff on steel imports. China’s been flooding the market with cheap steel, and this gives our local industry a fighting chance,” posted @ThorPrasad_. Others, like @_STOAngel, framed it as a stand for economic sovereignty: “This is India saying, ‘enough’s enough.’ Cheap Chinese steel undercuts local industries and jobs.” However, some expressed curiosity about China’s potential retaliation, reflecting the delicate balance of India’s trade strategy.
Looking Ahead
As India navigates a volatile global trade landscape, the 12% safeguard duty represents a calculated effort to protect its steel industry while balancing the needs of downstream sectors. The government will monitor the tariff’s impact over the next 200 days, with analysts expecting it to bolster domestic production and stabilize prices for local manufacturers. However, challenges remain, including potential cost increases for consumers and the risk of retaliatory trade measures from China.
For now, India’s steelmakers are breathing a sigh of relief, hopeful that the tariff will provide the breathing room needed to compete in an increasingly protectionist world. As one industry executive put it, “This is a much-needed step in the right direction, though the quantum could have been higher.”