India's Steel Market Set for Transformation with Safeguard Duty Proposal

India plans to reduce steel imports by 50% in FY26 through a proposed 12% safeguard duty. Aimed at aiding domestic manufacturers, this could boost profitability. The Directorate General of Trade Remedies suggests the duty to shield local industry from import surges, pending Finance Ministry's approval.

India's steel import landscape may undergo a significant shift, with the government poised to introduce a 12% safeguard duty on certain imported steel products. Experts suggest this move could halve imports by FY26 and enhance domestic manufacturers' profitability.

The Directorate General of Trade Remedies, acting under the commerce ministry, has recommended the provisional duty for 200 days to protect domestic interests from a surge in steel imports. A final decision now lies with the Finance Ministry. This safeguard duty is anticipated to bolster domestic producers by narrowing import volumes and driving industry capacity utilization to 83%, up from the current 78%.

Market experts, including representatives from ICRA Ltd and Crisil Intelligence, assert that such measures will stabilize steel prices and allow local mills to capitalize on increased demand. The backdrop of these developments includes evolving global trade restrictions and previous complaints from major players in the Indian Steel Association regarding the impact of low-cost imports.

(With inputs from agencies.)