Safeguard duty boosts pricing power of Indian steel-makers

The imposition of safeguard duty on steel imports in April has reined in inward shipments of the alloy rather suddenly, and enhanced the pricing powers of the domestic primary steel-makers.

However, this has the adverse fallout of raising the raw material costs of downstream players, and assorted industries that use steel as a vital production input. Since domestic inflation is currently subdued, the steel makers haven’t come under any great pressure as yet to bring down the prices.

The government imposed a 12% safeguard duty on steel products on April 1 for 200 days, primarily to rein in rising imports that increased 15% year-on-year to 9.5 million tonnes (MT) in FY25. An apprehension over a high influx of steel from China, Korea and elsewhere, following the imposition of a 25% import duty by the Trump administration, which took effect on March 10, may also have prompted the government to take the measure.