India Shields Domestic Steel with 12% Safeguard Duty

Crisil Ratings announced a 12% safeguard duty on specific steel imports for 200 days, offering relief to domestic producers from low-cost foreign inflows. While global steel prices decline, domestic demand is boosting premium prices. New capacity additions may challenge price dynamics despite this tariff support.

In a strategic move to bolster its domestic steel industry, India imposed a 12% safeguard duty on select steel imports for a 200-day period. This measure, according to Crisil Ratings, offers much-needed relief to domestic steelmakers who have been undercut by low-cost imports.

Reports indicate that despite recent trends showing a 5% premium on domestic steel prices over imports, global prices have been on a downtrend. The anticipation of a safeguard duty and robust local demand contributed to this premium uptick, yet the ongoing decline in global steel rates poses a challenge.

Beyond the imposition of protective tariffs, Indian steelmakers are eyeing increased domestic supply given upcoming capacity expansions. With an expected 9-10% climb in domestic demand driven by infrastructure developments, producers are hoping to maximize their production capacities and secure their margins.

(With inputs from agencies.)