India Imposes Three-Year Safeguard Duty on Steel Imports

India has imposed a three-year safeguard tariff on selected steel imports to protect domestic manufacturers from a surge in low-priced overseas shipments, particularly from China. The move, notified through an official government gazette on December 31, 2025, was welcomed by the steel industry and triggered a rally in metal stocks.

Details of the New Import Tariff

The safeguard duty will be levied at 12 per cent in the first year, gradually tapering to 11.5 per cent in the second year and 11 per cent in the third. The government said the measure responds to a “recent, sudden, sharp and significant increase” in steel imports that threatens domestic producers. While some developing countries are exempt, imports from “China”, Vietnam and Nepal will attract the duty. Specialised products such as stainless steel have been excluded from the tariff regime.

Rationale Behind the Safeguard Measure

The recommendation for the duty came from the “Directorate General of Trade Remedies”, which found that the import surge had already caused injury to Indian steelmakers and could lead to further harm if unchecked. Officials said the multi-year tariff replaces a short-term interim measure and is intended to give domestic producers breathing space to compete against underpriced imports.

Impact on Domestic Steel Industry

Indian steelmakers have long argued that cheaper imports, especially from China, have eroded margins and depressed prices in the domestic market. Policymakers believe the safeguard duty will help stabilise steel prices, improve capacity utilisation, and prevent imported material from displacing domestic output. Analysts note that Indian steel prices currently trade 13–15 per cent below the landed cost of Chinese imports, limiting mills’ ability to pass on costs without protection.

Imporatnt Facts for Exams

• India imposed a three-year safeguard duty on selected steel imports.
• The duty ranges from 12% in year one to 11% in year three.
• The measure was recommended by the Directorate General of Trade Remedies.
• Safeguard duties are used to protect domestic industry from import surges.

Market Reaction and Forward Outlook

Equity markets reacted positively to the announcement. Shares of major producers such as “Tata Steel”, “JSW Steel”, “Steel Authority of India” and “Jindal Steel” rose between 2 and 5 per cent. Going forward, the tariff is expected to support investment planning and production stability for steelmakers, though downstream industries such as infrastructure and heavy manufacturing may face marginally higher input costs as prices adjust to the new protective regime.