Safeguard duty could halve India’s steel imports in FY2025/2026 – ICRA

This step will also improve the profitability of local steel mills

India’s steel imports could be reduced by 50% in the 2025/2026 fiscal year (starting in April) if the government adopts recommendations to impose a 12% safeguard duty for 200 days. This is stated in a statement by the Indian credit rating agency ICRA, The Economic Times reports.

This step will also improve the profitability of local steel companies.

The Directorate General of Trade Remedies (DGTR) proposed to impose a 12 percent safeguard duty on imports of alloy and non-alloy flat steel products for 200 days after the investigation. The final decision is to be made by the Ministry of Finance.

According to Girish Kadam, Senior Vice President and Head of Corporate Sector Ratings at ICRA Ltd, amid declining imports and domestic demand growth of 7-8% in FY2025-2026, the agency expects capacity utilization to increase to 83% in this period. In the previous fiscal year, this figure was 78%.

Sekhul Bhatt, Research Director at Crisil Intelligence, believes that the introduction of a temporary safeguard duty on certain types of flat products will provide price support to local producers in the first half of FY2025/2026. The duty recommendation comes amid changing global trade dynamics, as some countries have imposed restrictions on steel imports.

The DGTR launched an investigation into a sudden surge in imports of unalloyed and alloyed flat products used in various industries in December last year. The investigation was initiated following a complaint filed by the Indian Steel Association on behalf of its members, including ArcelorMittal Nippon Steel India, JSW Steel, state-owned Steel Authority of India Limited (SAIL) and others.

The Directorate has preliminarily established that there has been a sudden, sharp and significant increase in imports of these products to India recently, which threatens the local industry. The report also states that delaying the application of provisional safeguard measures could lead to damage that would be difficult to remedy.

As GMK Center reported earlier, India may extend restrictions on imports of low-ash metallurgical coke beyond June this year to encourage steel mills to source this raw material from local suppliers.