• India has imposed a temporary 12 percent tariff on five categories of steel imports for 200 days to curb low-cost shipments – primarily from China, South Korea and Japan.
• Steel imports hit a nine-year high (9.5 million metric tons in 2024–25), with 78 percent from China, South Korea and Japan, straining India’s domestic steel industry and smaller mills.
• The move aligns with broader protectionist trends, mirroring U.S. and EU actions against Chinese steel dumping, but risks retaliation, especially from Beijing.
• Domestic steel giants (e.g., Tata Steel, JSW) support the duty as vital for protecting against “unfair” imports, while critics warn of higher input costs harming smaller manufacturers and export competitiveness.
• While the tariff may offer short-term relief to local producers, it could escalate trade conflicts and undermine India’s manufacturing growth.

India has enacted a 12 percent safeguard duty on select steel imports to counter a flood of low-cost shipments, primarily from China – with the levy escalating global trade tensions and raising concerns about retaliatory measures.

The temporary tariff, effective immediately for 200 days, follows an eight-month investigation by India’s Directorate General of Trade Remedies (DGTR) – an office under the Indian Ministry of Commerce and Industry. The 12 percent tax applies to five categories of steel products, namely:

• Hot rolled coils, sheets and plates
• Hot rolled plate mill plates
• Cold rolled coils and sheets
• Metallic coated steel coils and sheets
• Color coated coils and sheets

Steel imports hit a nine-year high of 9.5 million metric tons in the 2024-2025 fiscal year. Of this total, 78 percent came from China, South Korea and Japan. This has had serious repercussions for India’s steel industry, with smaller mills facing financial strain that has forced operational cuts and layoffs.

The move underscores New Delhi balancing act between protecting its industries and maintaining trade relationships. It also aligns with growing global trade protections, a move kick-started by U.S. President Donald Trump with his announcement of reciprocal tariffs against many countries.

In a similar vein, nations worldwide are adopting tariffs to shield domestic industries, particularly as China’s steel overcapacity – a lingering effect of its infrastructure-driven growth model – dwarfs global demand. (Related: Trump unveils reciprocal tariffs to level trade playing field, targets VAT systems.)

India’s steel tariffs: Self-reliance or trade turmoil?

Historically, steel has been a geopolitical flashpoint. The U.S. and the European Union have long accused China of dumping subsidized steel, triggering waves of tariffs since the early 2000s.

Notably, the 12 percent tariff arrives amid broader calls in the U.S. to penalize nations perceived as undermining fair trade. These include demands to leverage tariffs against countries refusing to repatriate illegal immigrants.

New Delhi’s action echoes this pattern, but risks provoking Beijing – which could retaliate against Indian exports like pharmaceuticals or textiles. Indian Steel Minister H.D. Kumaraswamy nevertheless framed the tariff as essential for India’s self-reliance.

“The move will provide critical relief to domestic producers – especially small- and medium-scale enterprises, who have faced immense pressure from rising imports,” he said. The minister added that the levy “will help restore market stability and reinforce the confidence of the domestic industry.”

Major steel producers like Tata Steel and JSW Steel welcomed the duty as a lifeline against “unfair” imports. Naveen Jindal of the Indian Steel Association praised the government for defending domestic producers, citing Prime Minister Narendra Modi’s “Atmanirbhar Bharat” (self-reliant India) initiative.

However, critics argue that such measures distort markets and could slow India’s manufacturing growth. Smaller manufacturers and engineering exporters warn that higher input costs could cripple their competitiveness abroad.

As trade barriers multiply, the long-term impact remains uncertain. While the tariff may offer temporary relief to Indian steelmakers, it risks escalating into a broader trade conflict.

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Sources include:

TheNationalPulse.com

Finance.Yahoo.com

MoneyControl.com

Brighteon.com