Safeguard Duty on Steel: Boon for Producers, Bane for Key Sectors

The recent imposition of a three-year safeguard duty on steel imports by the Directorate General of Trade Remedies (DGTR) has sparked concerns across multiple sectors in India. This new financial measure, supported by DGTR data citing an influx of Chinese imports and dwindling domestic profits, mandates an initial 12 percent duty, with a gradual decrease over the following two years.

However, the Global Trade Research Initiative (GTRI) challenges the rationale behind this decision, highlighting its potentially crippling repercussions for India's auto, engineering, and construction markets. GTRI argues that the imposed duties would escalate input costs, affecting the competitive edge of exports and complicating access to specific steel grades.

Critics, including over 250 key stakeholders such as major automobile manufacturers and electronics giants, have united in opposition. They argue that many essential steel grades are not sourced locally, necessitating imports. They also suggest that Indian producers are experiencing prosperity, with notable profitability margins, and warn that the duty could foster non-competitive, cartel-like conditions in the industry.

(With inputs from agencies.)