India plans to impose up to 25% tariffs on steel imported from China

Indian industry and government sources said India may impose up to 25% "safeguard tariffs" or temporary taxes on Chinese steel imports.

At a meeting chaired by Indian Commerce Minister Piyush Goyal on the 17th, the proposal received broad support, and small businesses gave up their initial objections after receiving assurances that they would not be hit by rising steel prices. An industry official who attended the meeting said: "Safeguard tariffs will be imposed after an investigation, which may be completed within a month. To address the concerns of small manufacturers, large steel companies will supply them with steel at a discount."

India's Trade Remedies Directorate General is investigating whether products from China have harmed the interests of domestic steel manufacturers. After the investigation is completed, the government is likely to impose a temporary tax.

"MSMEs registered with the government will get raw materials at FOB export prices," said Pankaj Chadha, chairman of the Engineering Export Promotion Council of India, after the meeting. Small manufacturers, which are expected to consume about 1 million tonnes of steel annually, will benefit from the arrangement, with prices around 20% lower than market prices. "

India, the world's second-largest crude steel producer, became a net importer of crude steel in the fiscal year ending March 31, with imports soaring to a record high in the first seven months of this fiscal year. India's finished steel imports reached 5.7 million tonnes in the April-October period this year, a seven-year high. Among them, finished steel imports from China reached 1.7 million tonnes, up 35.4% year-on-year, mainly including stainless steel, hot-rolled coils, galvanized sheets, steel plates and electrical steel.

An Indian government official familiar with the situation said that guaranteeing the supply of reasonably priced steel to small Indian companies would pave the way for the imposition of a temporary tax on steel imports, noting that "a major obstacle has been removed."

The Indian Ministry of Steel has proposed to impose a two-year 25% safeguard tariff on flat products to curb imports from China. However, the final decision still needs to wait for the results of relevant investigations.

It is worth noting that as early as September 2024, the Indian Ministry of Finance had announced that it would impose tariffs of 12% to 30% on some steel products imported from China and Vietnam.