Amid fears of a surge in steel imports into India—driven by trade diversion following US President Donald Trump’s sweeping 25 per cent tariffs and the European Union’s protectionist measures on steel—the anti-dumping watchdog under the Commerce and Industry Ministry has proposed a 12 per cent duty on certain imported steel products.
The recommendation to the Finance Ministry comes amid a tussle between steel producers and downstream industries. While steel manufacturers have been pushing for protection against cheaper imports, MSME manufacturers warn that the duty could drive up steel prices and strengthen monopolisation in the sector.
The anti-dumping body, the Directorate General of Trade Remedies (DGTR), which falls under the Commerce Ministry, reasoned that as many as 129 trade remedy measures have been adopted by countries such as the EU, Canada, the UK and others against steel products, leaving India vulnerable to injury.
However, former trade officer and head of think tank Global Trade Research Initiative (GTRI), Ajay Srivastava, said that the safeguard measure could encourage monopolistic practices, as sole domestic suppliers may restrict consumer choices and inflate prices.
Trump’s tariffs a trigger
“The authority also notes that on February 10, 2025, the US announced that it would apply a 25 per cent additional duty on steel products with effect from March 12, 2025, uniformly on all imports into the US from all sources, by revoking relaxations and exemptions granted, if any, to various countries. The domestic industry has claimed that, as a result of these measures, more imports are expected to be diverted from those countries, making India more vulnerable to increased imports,” DGTR said in its report dated Tuesday.
The DGTR said that large steel-producing economies such as Japan, South Korea and China have steel-producing capacities that far exceed their domestic consumption. It warned that, due to this excess capacity, steel producers in these economies may turn to export markets, which could pose a serious threat to the domestic industry.
‘Safeguard duty to encourage monopolistic practices’
On the investigation, Srivastava said that despite claims of industry distress, domestic steel production grew by 19 per cent between FY 2021-2024, with capacity utilisation rates between 83 and 90 per cent. He added that an estimated 10 per cent increase in steel demand in 2025 contradicts claims that the industry is in distress and requires protectionist measures.
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“The proposed safeguard duty would raise steel prices, adversely affecting downstream industries such as automotive, infrastructure, and renewable energy. Specialised steel requirements remain unmet domestically due to technological and quality limitations, making imports essential,” he said.
“Petitioners such as ArcelorMittal Nippon Steel India are major importers of the same products they claim are harming the domestic market, undermining their arguments for safeguard duties. ArcelorMittal Nippon Steel India (AMNS) and AMKL, key members of the Domestic Industry, have withdrawn support, weakening the legal standing of the petition,” he added.
‘Protect MSMEs Too’
Responding to the 12 per cent duty recommendation, Engineering Export Promotion Council of India (EEPC India) Chairman, Pankaj Chadha, stressed that there is a need for additional measures to protect MSMEs and user industries from potential price hikes and supply disruptions.
“There should be a provision for MSME units to procure steel at export parity prices to ensure their global competitiveness. Like the EU model, country-specific quotas should also be considered to avoid overdependence on any single source,” Chadha said.
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Highlighting concerns over domestic price escalation, Chadha said that using the Tariff Rate Quota (TRQ) price as a benchmark to maintain price stability could help prevent steep hikes, ensuring an affordable raw material supply for engineering and manufacturing sectors.