India Imposes Three-Year Safeguard Duty on Steel Imports

Government Notifies New Safeguard Duty on Steel

India has imposed a three-year safeguard tariff on selected steel imports to protect domestic manufacturers from a sharp rise in low-priced overseas shipments. The decision was notified through an official gazette on December 31, 2025 , and is aimed primarily at countering increased inflows from China and other exporting nations . The announcement was welcomed by the domestic steel industry and led to a rally in metal stocks.

Structure of the Safeguard Tariff

Under the new regime, imports covered by the notification will attract a 12 per cent duty in the first year , which will gradually decline to 11.5 per cent in the second year and 11 per cent in the third year . While certain developing countries have been granted exemptions, imports originating from China, Vietnam and Nepal will be subject to the duty. Specialised products such as stainless steel have been kept outside the scope of the measure.

Basis for the Protective Action

The safeguard duty follows an investigation by the Directorate General of Trade Remedies (DGTR) , which concluded that there had been a “sudden, sharp and significant” rise in steel imports. The DGTR warned that this surge had already injured domestic producers and posed the risk of further damage if corrective action was not taken. The multi-year duty replaces an earlier interim safeguard and provides longer-term relief to the industry.

Implications for the Steel Sector

Domestic steelmakers have argued that underpriced imports, particularly from China, have compressed margins and lowered domestic prices. Policymakers expect the duty to stabilise prices, improve capacity utilisation, and prevent displacement of Indian output. Analysts note that domestic steel prices are currently 13–15 per cent below the landed cost of Chinese steel , limiting pricing flexibility without protection.

Important Facts for Exams

• India imposed a three-year safeguard duty on steel imports

• Duty rates taper from 12% to 11% over three years

• DGTR recommends safeguard measures

• Safeguard duties address sudden import surges