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The Global Trade Research Initiative (GTRI) has demanded that a complete review of the Indian steel industry be done to assess the impact of existing import regulations before proceeding with new safeguard duties. It emphasized that on the economic front, this should be balanced, and decisions shouldn’t be made in haste without understanding the economic implications.

According to GTRI’s latest report, the ongoing safeguard investigation initiated by the Directorate General of Trade Remedies (DGTR) concerning the alleged surge in imports of specific steel products has brought out multiple technical flaws. The report says that it is reprobating DGTR’s evaluation favoring minor import spikes and that the misuse of global safeguard mechanisms could provoke challenges before the WTO.

Ajay Srivastava, Founder of GTRI, emphasized the importance of understanding the implications of existing measures on costs, economic growth, and job creation. “A thorough study on the state of the steel industry and its existing import frameworks is essential. Actions should always be based on data and never the result of some hasty reaction,” Srivastava said.

The report also underlines the inefficiencies existing in the above-described system, which includes QCOs, SIMS, and NOC requirements. It suggested simplifying these processes and collaborating with international labs to streamline compliance for foreign manufacturers.

The DGTR’s investigation began in December and focuses on the apparent increase in imports of flat products of non-alloy and alloy steel, which are key input materials for industries such as construction, automotive, and electrical panels. This, however, has raised concerns among various stakeholders in the industry, including MSME exporters. Hand Tool Association Chairman S.C. Ralhan warned that imposing additional duties would escalate production costs, making Indian products uncompetitive in global markets.

Various steel entities, including JSW Steel and Steel Authority of India, represented by the Indian Steel Association, called for a safeguard duty under the Customs Tariff Act, which they claim is threatening to domestic producers due to monopolistic production capabilities by countries such as China, Japan, and South Korea.

Despite those fears, as of FY2024, India was able to meet 94% of its steel demand from domestic sources, with the rest merely 6% coming from import sources. The production of crude steel increased from 109.14 million tons during 2019-20 to 144.04 million tons in 2023-24, demonstrating the solid domestic production capacities.

GTRI cautioned that any new measures should carefully balance protecting domestic players and supporting broader economic growth.