India proposes 12pc safeguard duty on steel imports

India's Directorate General of Trade Remedies (DGTR) has recommended a 12pc provisional safeguard duty on flat steel imports to protect the domestic industry.

The duty should be imposed for 200 days, according to a notice on 18 March from the DGTR, which is the government's investigative agency. The agency has recommended putting the safeguard measures in place immediately, citing potential damage resulting from any delays.

The proposed duty is lower than the 25pc rate sought by Indian steel mills to restrict inflows of cheaper imports that have pressured company profits.

The DGTR launched the safeguard investigation in December following an application by the Indian Steel Association. The agency concluded that there has been a "recent, sudden, sharp and significant increase in imports" of the products under investigation, which include hot-rolled and cold-rolled coils and sheets as well as galvanized and color-coated steel. Section 232 restrictions imposed by the US in 2018 and a flurry of protectionist measures by other countries have led to a diversion of trade flows to India, boosting imports, the agency said.

For hot-rolled coil (HRC), the proposed safeguard duty will not be applicable if product is imported at or above $675/t on a cif basis, the agency said.

Expectations of safeguard duties was one of the reasons for a recent jump in domestic HRC prices, which had fallen to multi-year lows in 2024 because of cheaper imports and lackluster domestic demand. Several Indian steel market participants had said the outlook for Indian steel prices was bearish in the absence of safeguards.

Argus assessed weekly Indian domestic 2.5-4.0mm HRC at 50,150 rupees/t ($579/t) ex-Mumbai, excluding goods and services tax, on 14 March, a rise of nearly 5pc compared to the end of February.

India became a net steel importer in the April 2023-March 2024 fiscal year and has remained so in the current fiscal year, which ends in March. Over April 2024-January 2025, finished steel imports rose by 21pc on the year to 8.4mn t, with South Korea being the biggest supplier. South Korea, China and Japan accounted for more than three-quarters of India's total finished steel imports during the last ten months, according to ministry data.

China and Vietnam will be the only developing nations that will incur duties, while others will be exempt, according to the DGTR's recommendations. This is because among developing countries, only China and Vietnam individually account for more than 3pc of imports into India, while other developing countries collectively do not have a more than 9pc share of imports, the agency said.
A hearing will be scheduled ahead of a final decision on safeguards, the DGTR said.

By Amruta Khandekar