The Centre has imposed a 12 per cent provisional safeguard duty on select flat steel imports to protect Indian producers from a flood of low-cost shipments, mainly from China and Vietnam. The duty, notified by the Finance Ministry on April 21, will remain in effect for 200 days.

The measure covers non-alloy and alloy flat steel products—such as hot rolled coils, cold rolled sheets, metallic coated and colour-coated steel—falling under tariff codes 7208 to 7226.

The decision follows findings by the Directorate General of Trade Remedies (DGTR), which flagged a sharp rise in imports as a serious threat to domestic players. Steel imports surged 41 per cent year-on-year in H1 FY25 to 4.74 million tonnes, with FY25 total imports at 9.25 million tonnes—India's highest since FY16. Meanwhile, exports fell to a 10-year low of 5 million tonnes, making India a net importer.

While imports are still small in proportion to India’s total consumption, cheap steel has dragged down domestic prices, squeezing margins. Of the 144.3 million tonnes of steel produced in FY24, over 40 per cent came from 1,000+ small producers, highlighting the impact across the industry.

The safeguard duty aims to offer temporary protection as Indian firms grapple with price suppression, underutilised capacity, and dumped supplies from abroad. However, it is not a blanket measure. Imports above defined CIF price levels—$675/tonne for hot rolled coils, $824/tonne for cold rolled sheets, and $964/tonne for colour-coated steel—are exempt, ensuring access to high-end products not readily available in India.

Most developing countries are exempt from the duty—except China and Vietnam—reflecting a targeted approach.

For MSMEs, the impact is mixed. Manufacturers relying on domestic supply may benefit from price stability and improved linkages with Indian mills. But those depending on imported speciality steel could face cost pressures. The price threshold, however, offers some breathing room for MSMEs needing premium grades.

Globally, the steel market remains oversupplied, with China producing over half the world’s steel and redirecting excess capacity as domestic demand slows. With the US and Europe also under pressure, surplus shipments are increasingly flowing into India.

The safeguard duty is a defensive move aimed at preventing long-term damage to India's steelmaking base. It also complies with WTO norms under Article XIX of GATT, allowing temporary curbs to protect domestic industries from import surges.