India is poised to embrace a wave of global steel protectionism, unveiling plans for sweeping temporary tariffs just days after the U.S. initiated its own.
In a move reflective of broader international efforts to shield domestic industries from an influx of metal, primarily from China, India’s Commerce Ministry outlined “safeguard” duties of 12% on various steel products.
These protective measures come amidst apprehensions about unfavorable import surges that potentially harm India’s domestic industry, as articulated in the ministry’s announcement.
Now the second-largest steel producer globally, India aligns itself with numerous countries across Asia, Europe, and Latin America seeking tariff relief in response to China’s exacerbated steel exports, driven by domestic property sector stress and catalyzed by U.S. trade policies.
The proposed duties, subject to a 200-day enforcement period, follow a rigorous scrutiny by Indian trade officials. An upcoming consultation and public hearing will finalize the decision after a 30-day review period, marking a critical juncture for the nation’s steel sector.
The anticipated measures are already buoying the market sentiment among Indian steelmakers. Shares of Steel Authority of India Ltd. spiked up to 5%, alongside advances in Tata Steel Ltd. and Jindal Steel & Power Ltd., reflecting optimism about the protective tariff’s potential to stabilize the domestic market.
Despite a reduction in overall steel output, China has witnessed a surge in exports, culminating in a record high at the start of 2024, further exaggerating the global supply glut.
India, grappling with a notable 80% hike in finished steel imports from China in the first seven months of the year, cites urgent circumstances necessitating immediate action.
The nation’s rapid steel output growth within the last decade underscores a commitment to expanding industrial capacity, though it currently accounts for only a fraction of China’s colossal production. This prospective safeguard duty aims to alleviate pressures on local producers who have lobbied for protective measures, highlighting the strategic necessity as India gears towards significant urban and industrial growth.
The Indian Steel Association had advocated for a more prolonged imposition of duties, spanning four years, to secure the industry’s long-term viability amid these shifting global dynamics.
