India May Hike Import Duty on Finished Steel to Shield Domestic Producers

India is likely to increase steel import duties in a bid to improve domestic steel manufacturers. The Ministry of Steel in India has recommended raising the basic customs for finished steel from 7.5% to 15%”, to tackle excessively high imports and endorse the domestic producers. The proposal is currently under consideration with the Finance Ministry for inclusion in the Union Budget, to be presented in February 2025. Sources from the agency have conveyed.

The Directorate General of Foreign Trade is looking into finished steel imports from China. The inquiry may lead to the imposition of a 25% safeguard duty for a limited period to control the flow of steel products and to ensure fair competition for local mills.

Finished steel imports into India reached an all-time high of 6.5 million metric tons within the first eight months of the current fiscal, an increase of a whopping 26.6% over the same period of last fiscal. To add to the situation, imports from China rose to a record 1.96 million metric tons, during the same period, reflecting a 22.8% year-on-year increase, which is indubitably detrimental for the local sector as the dumping practices have increasingly become worrisome for India and equally worryingly cheap imports have adversely hit the steel industry in India.

Based on government insiders, a dual approach in the form of a higher customs duty and a safeguard duty has the potential to effectively minimize import dependency and ease the pain faced by the domestic producers in India. The issue is being discussed in the background of rising concerns of India regarding dumping practices and how those practices and cheap imports are hurting the steel industry in India.

The steel sector plays a crucial role in infrastructure development and industrial activity in India. Policymakers want to balance support to local players with the needs of a burgeoning economy. Suggestions from the Ministry of Steel, therefore, reflect its commitment to shield domestic manufacturers and promote long-term growth in this sector.

Policies put forth by the duties will revamp, to quite an extent, trade dynamics within steel in India, favoring domestic steel producers and contributing to India’s self-reliance.