Govt May Double Safeguard Duty on Steel to 24% Amid China Dumping Fears

The government is mulling a doubling of the safeguard duty on steel imports from the existing 12% to up to 24%, aimed at protecting local steelmakers from the danger of the entry of cheap Chinese steel into the country.

A senior government ministry official told TOI that there have been complaints from Chinese companies seeking to evade the existing 12% provisional duty, which was applied for 200 days in late April. “We are considering multiple options,” the official added, suggesting a more permanent and higher safeguard duty after conducting a thorough investigation.

The step is taken in the wake of increasing trade diversion concerns, as Chinese steel with tariffs and quotas imposed on it in major markets such as the U.S. finds alternative routes. India, the second-largest producer of crude steel in the world, has become an important destination. India was a net importer of finished steel for the second consecutive year in FY 2024-25, with imports standing at nearly 10 million tonnes.

Although major local producers support the protectionist step, smaller players have expressed fears. Most of them have complained of cost pressures after local suppliers increased prices following the imposition of the 12% duty. The government is reportedly seeking to harmonize the interests of both parties before settling on a hike in the duty rate, according to sources.

The provisional duty on safeguarding is part of an overall drive to shield the Indian steel industry from unfair trade and deliver long-term sustainability. But with price sensitivity at home and a splintered industrial base, the government is moving cautiously.

A decision will be taken finally after the current investigation is over and the stakeholders are sounded out.