The Indian government is thinking about adding a “safeguard duty” on steel imports to protect local companies from cheaper steel, especially from China. Imported steel costs around 30% less than steel made in India, even after adding customs duty. This is hurting the profits of Indian steel producers and affecting their growth plans.
Once the steel industry suggests a duty structure, the government will investigate the impact of cheap steel imports. Officials said this safeguard duty could range between 8-12%, though the steel industry wants it to be around 25%, like in the U.S.
A safeguard duty is quicker to apply than raising customs duty and would cover all imports, regardless of trade agreements India has with other countries. Imported steel from China, South Korea, Japan, and even Vietnam has surged by 41.3% between April and September this year, turning India into a net steel importer.
Steel companies have welcomed the move, saying it’s crucial to stop the dumping of cheap steel, which is of lower quality. While the investigation could take months, companies agree that a safeguard duty is necessary to protect the domestic market and allow Indian steel producers to stay competitive.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
