Tata Steel, SAIL, JSW Steel rise as government imposes 12% safeguard duty on imports; what we know so far

Shares of Indian steel companies such as Tata Steel, Steel Authority of India Ltd (SAIL), Jindal Steel, and JSW Steel rose on Tuesday, April 22, after the government imposed a 12% provisional safeguard duty on imports with immediate effect. This move will protect domestic players from an increase in imports.

The 12% provisional safeguard duty for 200 days has been imposed on five steel product categories: hot rolled coils, sheets and plates; hot rolled plate mill plates; metallic coated steel coils and sheets; cold rolled coils and sheets; and colour coated coils and sheets.

Steel stocks climb

The decision comes after a recommendation by the Ministry of Commerce's investigation unit, the Directorate General of Trade Remedies (DGTR). In March, the DGTR suggested imposing the duty.

In a notification, the Department of Revenue said, "The Central Government after considering the said findings of the Director General (Trade Remedies), hereby imposes...a provisional safeguard duty at the rate of 12% ad valorem."

The safeguard duty is effective from the date of publication of this notification, i.e., April 21.

The import prices have been set between USD 675 per tonne to USD 964 per tonne for the five steel product categories by the government. If the shipment imported is below the import prices, it would attract the safeguard duty.

The safeguard duty will not be applicable if the product is imported at or about the import price on a cost insurance freight (CIF) basis, the notification said.

Union Steel Minister HD Kumaraswamy said, "The move will provide critical relief to domestic producers, especially small and medium-scale enterprises, who have faced immense pressure from rising imports. The safeguard duty will help restore market stability and reinforce the confidence of the domestic industry."

The Indian Steel Association welcomed the move and said the safeguard import duty will protect Indian manufacturers from unfair imports.