India plans to impose a 12% safeguard tax on imported flat materials

The General Directorate of Trade Remedies (DGTR) of SA517 Grade Q steel India has recommended imposing a temporary safeguard tax of 12% on imported non alloy and alloy steel flat products for a period of 200 days, citing the damage caused to the domestic steel industry by lower import prices.

According to a preliminary investigation by the Indian Trade Relief Authority on March 18th, it is recommended to impose a 12% safeguard tax on imported flat materials within 200 days, including non alloy and alloy hot-rolled coils, thin plates, medium thick plates, cold-rolled coils, and coated plates with HS codes 7208, 7209, 7210, 7211, 7212, 7225, and 7226. However, the agency excludes aluminum coated steel, aluminum silicon coated steel, hot-dip aluminum silicon coated steel, nickel coated steel, nickel plated steel, composite steel plates, cold-rolled grain oriented and non oriented electrical steel. The institution initiated a safeguard measures investigation on December 19, 2024.

The Indian Trade Relief Authority explained that except for China and Vietnam, other developing countries are exempt from safeguard taxes because their share in the total import volume does not exceed 9%, while China and Vietnam SA517 Grade Q steel each account for more than 3%.

In addition, the institution also suggests setting import price thresholds, as shown in Table 1. If the quotation of the product is higher than this level, no tariffs should be levied. The import price threshold for hot-rolled coils is set at $675 per ton (CIF). In March, the ex factory price of hot-rolled coils from major integrated steel manufacturers in India was INR 49500-51000 per ton (approximately USD 573-590 per ton), an increase of INR 2000 per ton (approximately USD 23 per ton) compared to February. Manufacturers may further increase prices in April.

One of the reasons for the Indian Trade Relief Authority taking these measures is the increase in import volume during the investigation period. According to the agency, India imported 6.6 million tons of flat materials from September 2023 to October 2024, a year-on-year increase of 61%, and a growth of 158% in the past two years. In addition, the global trade shift caused by protective measures in major economies, the oversupply resulting from weak domestic market demand in Asian countries, and the strong uncertainty of further development and changes in the global market have also affected the decision of the institution. The Indian Trade Relief Authority supports domestic steel manufacturers while largely rejecting requests from local downstream producers (mainly automobile manufacturers) to exclude some origins and grades from the investigation scope. The agency stated that the protective measures implemented by the United States have a significant impact on trade diversion. In response to this trade diversion, the European Union imposed a 25% safeguard tax in 2018. Other regions, including Canada, the UK (after Brexit), and Morocco, have also implemented similar tariffs, while Mexico has raised some steel tariffs from 25% to 50%. Several countries, including South Africa, Türkiye, Vietnam, Malaysia and GCC countries, also tightened import restrictions to prevent the influx of transferred steel. With restrictions in multiple major global markets, an increasing amount of excess steel is flowing into India SA517 Grade Q steel, intensifying competitive pressure on local producers.