Surge in cheap Chinese steel forces India to consider 12% import tax: Report

India is poised to slap a temporary 12% tariff on select steel imports in a bid to shield its domestic industry from a deluge of cheap shipments, particularly from China. The move, expected to roll out imminently, comes amid a sharp rise in inbound steel volumes that have left local producers scrambling. The government is looking to act fast, following recommendations from the Directorate General of Trade Remedies (DGTR), Reuters reported citing sources.

Union Minister for Steel and Heavy Industries, H D Kumaraswamy, welcomed the decision to impose a 12 percent safeguard duty on the import of certain non-alloy and alloy steel flat products. This measure is a timely and necessary step to protect domestic steel manufacturers from the adverse impact of import surges and to ensure fair competition in the market.

“This move will provide critical relief to domestic producers, especially small and medium-scale enterprises, who have faced immense pressure from rising imports. The safeguard duty will help restore market stability and reinforce the confidence of the domestic industry.”

Kumaraswamy expressed gratitude to the Hon’ble Prime Minister Narendra Modi for his leadership and continued support in strengthening strategic sectors under the vision of Atmanirbhar Bharat. He reiterated that the Ministry remains committed to working with all stakeholders to ensure that the Indian steel sector remains resilient, self-reliant, and globally competitive.

India, the world’s second-largest crude steel producer, turned net importer of finished steel for the second straight year in FY2024/25, with inbound shipments hitting a nine-year peak of 9.5 million metric tonnes, provisional government data shows.

The DGTR, under the federal trade ministry, last month recommended a 12% tariff on select steel products for 200 days. This suggestion followed a probe initiated in December 2023 to assess whether rising imports were damaging the local industry.

Official figures underline the trend: steel imports jumped over 20% to 8.29 million tonnes during April to January this fiscal year, compared to 6.89 million tonnes in the same period of 2023-24. 

“India was a net importer of finished steel. Import of finished steel was at 8.292 MT, with a year-on-year growth of 20.3 percent,” the data noted.

Meanwhile, exports have dipped significantly down 28.9% to 3.994 million tonnes from 5.619 million tonnes in the corresponding period a year earlier.

Domestic players have raised alarm over the surge, especially from countries like China. They argue that the influx is undermining their competitiveness and pushing the industry to the edge.

China, the world’s top steel exporter, has recently ramped up shipments to a record 110.72 million tonnes in 2024. The spike, its highest in nine years, is being driven by low prices aimed at offsetting tepid global demand, triggering unease among global producers grappling with squeezed margins.