Protecting Domestic Steel Industry

In a significant move to safeguard its domestic steel industry from the adverse effects of low-cost imports, India has announced a 12% provisional safeguard duty on certain steel products. This decision, spearheaded by the Ministry of Steel, is aimed at providing immediate relief to local manufacturers struggling with the influx of foreign steel.

Details of the Safeguard Duty

The provisional duty, set at 12% ad valorem, will be effective for 200 days unless revoked earlier. The government has also established minimum import prices ranging from USD 675 to USD 964 per tonne for five categories of steel products, ensuring that only shipments below these prices will incur the duty.

Industry and Government Response

Union Minister H. D. Kumaraswamy hailed the decision as a necessary step to ensure fair competition and market stability, particularly benefiting small and medium-scale enterprises. The Directorate General of Trade Remedies (DGTR) had previously recommended this measure following an investigation triggered by a petition from the Indian Steel Association (ISA).

Global Context

The DGTR highlighted the global trend of increasing import barriers, citing examples from the EU, South Africa, and others, as a response to trade diversion effects. India's move is seen as a strategic effort to align with these global practices and protect its domestic market.

Understanding Safeguard Measures

Safeguard measures, including duties or quantitative restrictions, are recognized trade remedies under the WTO. They are designed to protect domestic industries from sudden and significant import surges that threaten to cause serious injury.