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Mint
24-04-2025
- Business
- Mint
India's steel safeguard duty offers a short-term fix—but will it be enough?
India has fired a warning shot in the global steel trade war. In a move to stem the tide of cheap foreign supply, the Indian government has imposed a 12% provisional safeguard duty on flat steel imports from China and Vietnam. The duty, effective for 200 days, is aimed at shielding domestic producers from a surge in underpriced imports. The timing is significant. India has become a net importer of steel for the second year in a row, with imports hitting a nine-year high of 9.5 million tonnes in FY25, while exports slumped over 60% to 6.9 million tonnes. The surge has raised alarms over dumping—especially from China, which has been offloading excess capacity globally as domestic demand slows and tariff tensions with the US escalate. Read this | India eyes inclusion of 25% steel, aluminium tariffs in BTA talks with US So what does the safeguard duty mean for India's metal companies? Here's a closer look. China, South Korea, and Japan accounted for nearly 80% of India's steel imports in FY25. While India is the world's second-largest steel producer, it has been unable to shield its market from a surge in low-cost supply—particularly flat products used in construction, infrastructure, and manufacturing. Much of this supply is aggressively priced, with Chinese producers ramping up exports instead of cutting output as domestic demand slows. Some shipments are even routed via Vietnam, further muddying trade flows. India's domestic producers have taken a hit, triggering calls for government intervention. The Indian Steel Association—which represents major players such as JSW Steel, Jindal Steel, and Steel Authority of India—urged the government to step in as falling prices eroded profit margins. Hot-rolled coil (HRC) prices, for instance, dropped to a four-year low of ₹ 46,500 per metric tonne in September 2024, before rebounding to ₹ 51,300 in April 2025 as expectations of a safeguard duty took hold. Industry capacity utilization also declined, slipping to 78% in FY25—its lowest level in four years—amid waning demand. In response, the Directorate General of Trade Remedies launched a probe in December 2024 into a sharp spike in imports of alloy and non-alloy flat steel products, which are widely used across sectors such as automobiles, capital goods, and farm equipment. Adding urgency was the US decision to levy steep duties on Chinese steel, prompting fears that Beijing would flood alternative markets—including India—with its surplus production. To counter the flood of cheap imports, India on 21 April imposed a 12% provisional safeguard duty on alloy and non-alloy flat steel products from China and Vietnam. The measure, valid for 200 days, is intended to create a price floor and restore a level playing field for domestic producers. But the levy isn't blanket. To avoid disrupting legitimate trade, the government has carved out exemptions for higher-priced shipments. For instance, no duty applies if hot-rolled coil (HRC) is priced above $675 per tonne—ensuring that only underpriced, potentially dumped imports are penalised. Analysts expect the duty to sharply curtail imports—by as much as 50% in FY26, according to rating agency Icra Ltd—giving local producers room to reclaim market share. Read this | Steel stocks rally on safeguard duty proposal—but the real test lies ahead Domestic demand is projected to grow 7–8%, and capacity utilisation could climb back to 83%, up from a four-year low of 78% in FY25, it added. That could translate into stronger pricing power and margin recovery, especially with input costs like iron ore and coking coal still near cyclical lows. JSW Steel , with its heavy tilt toward flat products, stands to gain the most. Steel Authority of India Ltd (SAIL) may see the biggest earnings bounce, though off a low base. Jefferies estimates that a 15% duty could lift HRC prices by 10% and boost Ebitda by 15–40%. But rising mineral levies from state governments could erode some of those gains. Read this | Tamil Nadu's limestone tax: A crushing blow to cement margins? Short-term relief may not translate into sustained earnings growth. Analysts caution that global oversupply, tepid infrastructure spending, and muted domestic demand could keep a lid on steel prices. India's steel consumption rose just 3.4% in FY25, a sharp slowdown from 11.7% the year before. Despite the safeguard duty, domestic hot-rolled coil prices remain steep—about 18% higher than comparable imports. Even after the duty, they hold a 6% premium, leaving little headroom for further price hikes. That could blunt the impact on profitability. There are structural hurdles too. HDFC Securities notes that nearly two-thirds of India's steel imports come from countries with Free Trade Agreements—such as Japan, South Korea, and Mauritius—that are exempt from the new duty. In fact, South Korea has now overtaken China as India's top steel supplier. Still, the sector's long-term outlook remains intact. India's per capita steel consumption is just 93 kg—far below the global average of 220 kg. The government aims to raise this to 158 kg by 2031 under the National Steel Policy, banking on rising urbanisation, industrial growth, and infrastructure buildout. For more such analyses, read Profit Pulse . For now, the safeguard duty offers a temporary shield. But the industry's fortunes will ultimately hinge on a revival in domestic demand, macroeconomic stability, and how China manages its slowing economy. About the author: Madhvendra has over seven years of experience in equity markets and has cleared the NISM-Series-XV: Research Analyst Certification Examination. He specialises in writing detailed research articles on listed Indian companies, sectoral trends, and macroeconomic developments. Follow him on LinkedIn. Disclosure: The writer does not hold the stocks discussed in this article. The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Hans India
23-04-2025
- Business
- Hans India
Naveen Jindal lauds 12 pc safeguard duty on steel imports
New Delhi: Naveen Jindal, President of Indian Steel Association and Chairman of Jindal Steel and Power, on Tuesday welcomed 12 per cent safeguard duty on certain flat steel products for 200 days, effective from April 21. Jindal, who was pivotal in advocating for this safeguard duty, stated, 'We are grateful for the government's decisive move to impose 12 per cent safeguard duty on flat steel products, much needed to stop imports arriving at predatory prices'. 'This support will help investors to focus with renewed vigour for a capacity build-up towards 300 million tonnes by 2030 for an Aatmanirbhar Bharat and will set the cornerstone for a Viksit Bharat,' he said. In a decisive move to shield its domestic steel industry from a surge of low-priced imports, the Indian government has imposed 12 per cent safeguard duty on certain flat steel products for 200 days. This temporary measure aims to curb the influx of cheap steel imports, primarily from China, South Korea and Japan, which accounted for 78 per cent of India's finished steel imports in the fiscal year 2024-25. The Directorate General of Trade Remedies (DGTR) recommended this duty following an investigation initiated in December 2024. The probe revealed that the sharp increase in imports of non-alloy and alloy steel flat products was causing significant injury to domestic producers. India, the world's second-largest crude steel producer, became a net importer of finished steel for the second consecutive year, with imports reaching a nine-year high of 9.5 million metric tonnes in 2024-25. The safeguard duty is expected to provide much-needed relief to domestic steelmakers, particularly small and medium-sized enterprises, who have faced immense pressure from rising imports. Industry leaders, including JSW Steel, Tata Steel, Steel Authority of India, and ArcelorMittal Nippon Steel India, have supported the imposition of import curbs. India's National Steel Policy 2017 sets an ambitious target to increase the country's steel production capacity to 300 million tonnes by 2030. Achieving this goal requires substantial investment and confidence in the domestic market, both of which are bolstered by protective measures like the newly imposed safeguard duty.
Hans India
23-04-2025
- Business
- Hans India
Steel cos welcome 12% duty on steel imports
New Delhi: Naveen Jindal, President of the Indian Steel Association and Chairman of Jindal Steel and Power, on Tuesday welcomed 12 per cent safeguard duty on certain flat steel products for 200 days, effective from April 21. Jindal, who was pivotal in advocating for this safeguard duty, stated: 'We are grateful for the government's decisive move to impose a 12 per cent safeguard duty on flat steel products, much needed to stop imports arriving at predatory prices.' 'This support will help investors to focus with renewed vigour for a capacity build-up towards 300 million tonne by 2030 for an Aatmanirbhar Bharat and will set the cornerstone for a Viksit Bharat,' he said in a statement. In a decisive move to shield its domestic steel industry from a surge of low-priced imports, the Indian government has imposed a 12 per cent safeguard duty on certain flat steel products for 200 days. This temporary measure aims to curb the influx of cheap steel imports, primarily from China, South Korea and Japan, which accounted for 78 per cent of India's finished steel imports in the fiscal year 2024-25. The Directorate General of Trade Remedies (DGTR) recommended this duty following an investigation initiated in December 2024. The probe revealed that the sharp increase in imports of non-alloy and alloy steel flat products was causing significant injury to domestic producers. India, the world's second-largest crude steel producer, became a net importer of finished steel for the second consecutive year, with imports reaching a nine-year high of 9.5 million metric tonnes in 2024-25.
The Independent
04-03-2025
- Business
- The Independent
India's steel industry contemplates potential fallout from Trump administration tariffs
Rows of small factories line the streets of a dusty suburb in Bengaluru, where workers weld and cast Indian-made steel into everything from car parts to kitchen sinks. Here, U.S. President Trump's announcement to impose high trade tariffs on steel imports has some unexpected supporters. Many industry workers and experts expect that the result of tariffs will be that cheap steel gets dumped in places like India. That's because the announced 25% tariff will make it too expensive for many companies in countries like China and South Korea to keep exporting to the U.S. For B. Praveen of Sun Techpro Engineering, which makes products from steel metal sheets, it means his 'wafer-thin' profit margins will probably grow as the steel he buys gets cheaper. 'For thousands of companies like mine, this can be a good thing,' he said. Businesses such as Praveen's employ over 200 million Indians and are key drivers of India's economy. But cheaper steel in India isn't good for everyone. In February Naveen Jindal, the president of the Indian Steel Association, which represents all India's steelmakers, said that he was 'deeply concerned,' especially since 'India is one of the few major markets without any trade restrictions,' making it a target for potential steel dumping. And the increased competition could impact efforts by India to produce its own steel more cleanly. The current production of most Indian steel releases high levels of greenhouse gas emissions, which cause climate change. Reduction efforts could be cut in the interest of keeping profits up. India's steel industry is big and dirty — and is set to keep growing India is the world's most populous nation and one of the fastest-growing major economies. Steel demand is rising rapidly due to fast-paced urbanization, infrastructure, and industrial growth, and the government expects steel production to increase from 120 million tons to 300 million tons in the next five years. Currently, up to 12% of India's greenhouse gas emissions come from steelmaking according to the Global Energy Monitor, an organization that tracks energy projects around the globe. It found this could likely double in five years if more steel is produced as per the government's plans. Henna Khadeeja, a research analyst with GEM, explained that unlike China, Europe, or the United States, Indian steelmakers still mostly use coal-based blast furnaces to make steel, which are more high-emitting. In September last year, the Indian government said it would invest $1.72 billion to help the steel industry transition to cleaner methods of steelmaking. But Khadeeja said all the new steel expansion plans that have been announced are for coal-based steel production facilities. 'Right now, the focus is mostly on producing as much steel as possible. The strategy is mostly to retroactively decarbonize the steel once the capacity is built in place," she said. Cleaning up steel is vital for India's future Building more coal-based blast furnaces make it more difficult for India to export its steel in the future, particularly to Europe, said Easwaran Narassimhan of the New Delhi-based think tank Sustainable Futures Collective. The European Carbon Border Adjustment Mechanism, a tax on carbon emissions that Europe will begin charging for all products imported to the bloc from next year, would likely turn off any buyers from steel made with coal-based blast furnaces. 'China's steel production is less emissions-intensive, which means it's going to face a lesser impact from European carbon taxes,' said Narassimhan. 'Any amount of short-term pain today is going to be worth in the long run." India too has ambitious climate goals and wants to produce 500 gigawatts of clean power — enough to power nearly 300 million Indian homes — by the end of this decade. The South Asian nation recently crossed the milestone of installing 100 gigawatts of solar power, most of which was installed in the last 10 years. India also aims to go net zero — that is to stop adding planet-warming gas to the atmosphere, either by preventing the emissions in the first place or removing an equivalent amount through natural or technological means — by 2070. Indian steelmakers said they recognize the need to emit less but are apprehensive about how much it'll cost them. 'If you're not financially viable, you cannot exist as a business,' said Prabodh Acharya, chief sustainability officer at JSW Group, one of India's biggest steel companies. 'Steel is essential for the growth of society and economy. We need to find the right balance between growth, economy and decarbonization,' he said. ___ ___ The Associated Press' climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at
Associated Press
04-03-2025
- Business
- Associated Press
India's steel industry contemplates potential fallout from Trump administration tariffs
BENGALURU, India (AP) — Rows of small factories line the streets of a dusty suburb in Bengaluru, where workers weld and cast Indian-made steel into everything from car parts to kitchen sinks. Here, U.S. President Trump's announcement to impose high trade tariffs on steel imports has some unexpected supporters. Many industry workers and experts expect that the result of tariffs will be that cheap steel gets dumped in places like India. That's because the announced 25% tariff will make it too expensive for many companies in countries like China and South Korea to keep exporting to the U.S. For B. Praveen of Sun Techpro Engineering, which makes products from steel metal sheets, it means his 'wafer-thin' profit margins will probably grow as the steel he buys gets cheaper. 'For thousands of companies like mine, this can be a good thing,' he said. Businesses such as Praveen's employ over 200 million Indians and are key drivers of India's economy. But cheaper steel in India isn't good for everyone. In February Naveen Jindal, the president of the Indian Steel Association, which represents all India's steelmakers, said that he was 'deeply concerned,' especially since 'India is one of the few major markets without any trade restrictions,' making it a target for potential steel dumping. And the increased competition could impact efforts by India to produce its own steel more cleanly. The current production of most Indian steel releases high levels of greenhouse gas emissions, which cause climate change. Reduction efforts could be cut in the interest of keeping profits up. India's steel industry is big and dirty — and is set to keep growing India is the world's most populous nation and one of the fastest-growing major economies. Steel demand is rising rapidly due to fast-paced urbanization, infrastructure, and industrial growth, and the government expects steel production to increase from 120 million tons to 300 million tons in the next five years. Currently, up to 12% of India's greenhouse gas emissions come from steelmaking according to the Global Energy Monitor, an organization that tracks energy projects around the globe. It found this could likely double in five years if more steel is produced as per the government's plans. Henna Khadeeja, a research analyst with GEM, explained that unlike China, Europe, or the United States, Indian steelmakers still mostly use coal-based blast furnaces to make steel, which are more high-emitting. In September last year, the Indian government said it would invest $1.72 billion to help the steel industry transition to cleaner methods of steelmaking. But Khadeeja said all the new steel expansion plans that have been announced are for coal-based steel production facilities. 'Right now, the focus is mostly on producing as much steel as possible. The strategy is mostly to retroactively decarbonize the steel once the capacity is built in place,' she said. Cleaning up steel is vital for India's future Building more coal-based blast furnaces make it more difficult for India to export its steel in the future, particularly to Europe, said Easwaran Narassimhan of the New Delhi-based think tank Sustainable Futures Collective. The European Carbon Border Adjustment Mechanism, a tax on carbon emissions that Europe will begin charging for all products imported to the bloc from next year, would likely turn off any buyers from steel made with coal-based blast furnaces. 'China's steel production is less emissions-intensive, which means it's going to face a lesser impact from European carbon taxes,' said Narassimhan. 'Any amount of short-term pain today is going to be worth in the long run.' India too has ambitious climate goals and wants to produce 500 gigawatts of clean power — enough to power nearly 300 million Indian homes — by the end of this decade. The South Asian nation recently crossed the milestone of installing 100 gigawatts of solar power, most of which was installed in the last 10 years. India also aims to go net zero — that is to stop adding planet-warming gas to the atmosphere, either by preventing the emissions in the first place or removing an equivalent amount through natural or technological means — by 2070. Indian steelmakers said they recognize the need to emit less but are apprehensive about how much it'll cost them. 'If you're not financially viable, you cannot exist as a business,' said Prabodh Acharya, chief sustainability officer at JSW Group, one of India's biggest steel companies. 'Steel is essential for the growth of society and economy. We need to find the right balance between growth, economy and decarbonization,' he said. ___ ___
