India's Move To Protect Steel Industry Can Be Harmful For Auto, Engineering, Construction Sectors: GTRI
The safeguard duty, confirmed on August 16, will start at 12 per cent in the first year, followed by 11.5 per cent in the second year and 11 per cent in the third year.
The three-year safeguard duty on steel imports by Directorate General of Trade Remedies (DGTR) could cripple the auto, engineering, and construction sectors by pushing up input costs and squeezing downstream users, stated a report by the Global Trade Research Initiative (GTRI).
The safeguard duty, confirmed on August 16, will start at 12 per cent in the first year, followed by 11.5 per cent in the second year and 11 per cent in the third year.
DGTR stated that the decision is taken due to a sharp surge in steel imports, especially from China, and a steep fall in domestic industry profits.
However, GTRI stated "that duties would cripple auto, engineering, and construction sectors". DGTR launched probe in December 2024 after complaints from major producers such as AMNS, JSW Steel, Jindal Steel & Power, and SAIL, covered a wide range of products including hot-rolled and cold-rolled steel, metallic-coated, and colour-coated steel.
A provisional 12 per cent duty had already been imposed on April 21, 2025. In its final order, DGTR said imports rose "recently, suddenly, sharply and significantly" during October 2023 to September 2024.
As per data, Chinese exports alone reached 110.7 million MT in 2024, a 25 per cent jump from 2023, with much of the excess supply being redirected to India.
Imported hot-rolled coils landed at USD 450 per MT in May 2025, which was nearly USD 87 per MT lower than Indian costs, even after duties.
Domestic profit before tax plunged 76 per cent, which DGTR said amounted to "serious injury" to local producers. However, GTRI stated that more than 250 stakeholders, including leading automakers, electronics firms, and industry bodies opposed the duty. Tata Motors, Maruti Suzuki, Hyundai, Toyota Kirloskar, LG, Samsung, Whirlpool, ABB, Siemens, Crompton Greaves, Havells, and L&T were among those warning that the move would raise input costs, harm export competitiveness, and make customer-specific grades harder to source.
ACMA, EEPC, and IEEMA echoed similar concerns, saying many grades of steel are not produced locally and imports are essential. They argued that import volumes were only returning to pre-COVID levels, not surging, and criticized DGTR's choice of base year.
GTRI also countered DGTR's findings, noting that India remains a net steel importer with demand in FY2024-25 estimated at 137.82 MT against domestic production of 132.89 MT.
It pointed out that steelmakers still enjoyed strong profitability, with Tata Steel recording a 21 per cent EBITDA margin in India and SAIL at 11.6 per cent. According to GTRI, far from being under distress, Indian steel producers were thriving, and the safeguard duty risks creating cartel-like conditions when combined with Quality Control Orders.
The GTRI also noted that the safeguard duty would end up protecting a few large producers at the cost of India's wider manufacturing ecosystem.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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