Ministry of Steel recommends 25% safeguard duty on steel imports

The Ministry of Steel has recommended imposing a 25% safeguard duty on specific steel imports. This proposal was discussed during a high-level meeting in New Delhi, which brought together Union Steel Minister H.D. Kumaraswamy, Commerce and Industry Minister Piyush Goyal, senior government officials, and leading executives from prominent steel manufacturers, including SAIL, Tata Steel, JSW Steel, and AMNS India.

In a significant move to address concerns of the domestic steel industry, the Ministry of Steel has proposed a 25% safeguard duty on certain steel imports. The announcement came during a high-level meeting in New Delhi, attended by Union Minister of Steel H.D. Kumaraswamy, Commerce and Industry Minister Piyush Goyal, senior government officials, and top executives from major steel manufacturers like SAIL, Tata Steel, JSW Steel, and AMNS India.

The meeting highlighted the growing challenges faced by the domestic steel sector due to surging imports, particularly from free trade agreement (FTA) partner countries, where duties are negligible. Between April and September 2024, India’s steel imports reached 5.51 million tonnes, a sharp rise from 3.66 million tonnes during the same period last year, with imports from China alone increasing from 1.02 million tonnes to 1.85 million tonnes.

Minister Kumaraswamy emphasized the urgency of safeguarding the industry to ensure its competitiveness and contribution to India’s growth. “Strengthening the steel and heavy industries is critical for building a self-reliant India,” he stated, reiterating the government’s commitment to fostering innovation, boosting domestic production, and creating an enabling environment for growth.

Commerce and Industry Minister Piyush Goyal echoed these sentiments, noting the steel and metallurgical sectors’ vital roles in India’s development journey. The discussions focused on boosting production quality, enhancing global competitiveness, and addressing issues related to ease of doing business.

Domestic steel producers have long voiced concerns over the impact of cheap imports on their operations. Many imports benefit from FTAs, allowing them to bypass duties, which, according to Steel Secretary Sandeep Poundrik, accounts for 62% of total imports. Think tank GTRI has called for a careful review of these agreements, arguing that some FTAs enable Indian firms to partner with foreign producers and re-import steel at concessional rates, undermining fair competition.

Port delays and regulatory hurdles exacerbate the challenges. GTRI Founder Ajay Srivastava highlighted that over 10,000 steel user units face financial strain due to excessive scrutiny and red tape, impacting the broader manufacturing ecosystem.

The proposed safeguard duty aims to shield domestic producers from unfair competition, encourage local manufacturing, and solidify India’s position as a global manufacturing hub. As the government works to balance trade agreements and domestic industry interests, stakeholders anticipate comprehensive measures to address the sector’s pressing concerns.