India Proposes Three-Year Safeguard Duty on Flat Steel Imports, Sparking Industry Debate

India’s Directorate General of Trade Remedies (DGTR) has issued a final recommendation for the imposition of a safeguard duty on certain imported flat steel products for a period of three years. The measure aims to protect domestic manufacturers from a sudden surge in inbound shipments, but the proposal has drawn significant criticism from downstream industries.

Details of the Proposed Duty

The DGTR's investigation was initiated following a complaint by the Indian Steel Association (ISA). Based on preliminary findings, the government had already imposed a provisional 12 percent safeguard duty for 200 days starting in April 2025. In its final report, the DGTR has recommended a phased-down duty structure:

• 12 percent in the first year.
• 11.5 percent in the second year.
• 11 percent in the third year.

The product scope is broad, covering: hot-rolled coils and sheets; cold-rolled coils and sheets; metallic-coated steel (galvanized, aluminium-zinc, zinc-magnesium); and color-coated coils and sheets. Key exclusions are stainless steel, electrical steel, tin mill products, and API-grade line pipes.

Rationale and Opposition

The DGTR argued that the measure is necessary due to the "current serious injury" and "imminent threat of injury" to the domestic industry from the surge in imports. The duty is intended to ensure a fair selling price and balance the interests of all stakeholders.

However, the recommendation has sparked considerable controversy. The trade policy think-tank Global Trade Research Initiative (GTRI) strongly criticized the proposal. GTRI stated that the DGTR had overruled objections from over 250 industry stakeholders, including automobile manufacturers and consumer durable companies. These sectors argue that the safeguard duty will significantly increase their input material costs, thereby eroding their competitiveness and potentially leading to higher prices for end consumers.

Impact Analysis and Outlook

The imposition of a safeguard duty creates a complex scenario. On one hand, it could provide essential protection for domestic steel producers, allowing them to stabilize operations and compete against cheaper imports. On the other hand, it places a cost burden on the entire supply chain that relies on steel as a primary raw material. For investors, the final decision by the Indian government will be a critical factor to monitor, as it will directly impact costs, profitability, and pricing strategies across several major industries in the coming years.

Source: Based on compiled and verified information from the notification by India's Directorate General of Trade Remedies (DGTR) and related market reports.