Government protects domestic steelmakers by hiking tariffs on foreign shipments
India has officially stepped up its trade defenses by implementing a fresh tax on specific steel imports. This move, announced on Tuesday, introduces a three-year tariff structure ranging from 11% to 12%. The primary goal is to shield local manufacturers from an influx of low-priced steel, particularly coming from China.
Shielding the Domestic Market
This decision follows a detailed investigation by the Directorate General of Trade Remedies (DGTR). The agency found that a sudden and sharp increase in foreign shipments was threatening the health of India’s domestic steel industry. By making foreign steel more expensive, the government aims to level the playing field for local giants and smaller producers alike. This is particularly significant for Odisha, which serves as the steel heartland of India. Large hubs like Kalinga Nagar and the Rourkela Steel Plant stand to benefit from reduced competition against undervalued foreign goods.
How the New Tax Works
The Indian steel import duty is designed to be a gradual measure. In the first year, a 12% levy will be applied. This will decrease slightly to 11.5% in the second year and finally settle at 11% in the third year. While the duty targets major exporters like China, Vietnam, and Nepal, certain developing nations are exempt. It is also important to note that specialty products, such as stainless steel, are not covered under this specific new order.
A Global Trend of Protectionism
India’s policy shift does not happen in a vacuum. The global trade landscape has been volatile ever since the US introduced heavy tariffs on Chinese steel. This forced Chinese exporters to find new markets, leading to "dumping" concerns in countries like India, South Korea, and Vietnam. After a temporary 200-day tariff expired in November 2025, the Indian Stainless Steel Development Association and other industry bodies pushed for a more permanent solution to ensure long-term stability for the nation's workforce and industrial growth.
