India's proposed 12% tariff on steel imports, though lower than industry expectations, is seen as a partial shield against the surge of inexpensive Chinese steel, industry executives remarked on Wednesday.
Despite holding the title of the world's second-largest crude steel producer, India has been importing record volumes of steel from China, South Korea, and Japan since the financial year began in April.
On Tuesday, the Directorate General of Trade Remedies (DGTR), operating under the federal trade ministry, suggested a 12% safeguard duty on steel imports for 200 days to mitigate "serious injury and its potential threat" to domestic manufacturers.
Last month, Steel Minister H.D. Kumaraswamy indicated that India might impose a 15%-25% levy on Chinese steel, citing a "serious challenge" to local producers. The proposed 12% duty falls short of these projections, leaving some industry players underwhelmed.
"The industry had anticipated a levy exceeding 15%," said an executive from a leading steel manufacturer who wished to remain anonymous. "Still, it's encouraging that the government is taking steps to curb excessive imports."
Although a formal decision on the tax is pending, steelmakers remain optimistic that the measure will help curb unregulated imports.
"This duty is only half of what we hoped for, but it's better than no action at all," noted a senior executive at a prominent steel mill.
India became a net importer of finished steel in the fiscal year ending March 2024, with Chinese shipments steadily increasing. Smaller domestic mills have felt the squeeze, with some reducing operations and contemplating layoffs, according to a Reuters report from December.
The new tariff is expected to enable long steel product manufacturers to raise prices by 2-3%, said Nitin Kabra, director of marketing at Maharashtra-based Bhagyalaxmi Rolling Mill.
The DGTR explained that the proposed duty aims to prevent trade diversion following import restrictions imposed by the U.S. and other nations.
"If implemented, this safeguard duty will provide some breathing space from import pressures and enhance our competitiveness," remarked Adarsh Garg, chairman and managing director of Punjab-based Jogindra Group.