Shares of metal companies rose up to 2% on Monday, tracking gains in broader markets, after the Indian government imposed a 12% safeguard duty on certain steel imports.
The decision, aimed at curbing the influx of cheaper steel from countries like China, came into effect immediately and will remain in force for 200 days unless revoked, superseded or amended earlier.
The Nifty Metal index climbed 1% on the day, with prominent players JSW Steel rising 1.8%, and Tata Steel and Steel Authority of India Limited (SAIL) advancing around 2% each.
The overall market sentiment remained upbeat, as both benchmark indices Sensex and Nifty recorded modest gains in response to the policy intervention.
Move targets surge in Chinese steel shipments
India, currently the world’s second-largest producer of crude steel, has seen a sharp rise in imports of cheaper steel products, largely from China.
The latest safeguard duty is widely perceived as a strategic move to protect the domestic steel industry from injury caused by this influx.
In the fiscal year 2024–25, India was a net importer of finished steel for the second consecutive year, with imports touching a nine-year high of 9.5 million metric tons, according to provisional government data.
“The safeguard duty will help restore a level playing field in the market,” said Steel Minister H. D. Kumaraswamy.
“This move will provide critical relief to domestic producers, especially small and medium-scale enterprises, who have faced immense pressure from rising imports.”
The Ministry of Finance stated in its official order that the safeguard duty aims to prevent further damage to local manufacturing units, many of which have been compelled to cut back on production or consider job cuts due to the pricing pressure from imports.
First major trade policy step post-Trump-era tariffs
This is the Indian government’s first major trade policy shift since the United States, under then-President Donald Trump, triggered a wave of global protectionism by imposing broad-based tariffs on various imports, including steel.
Though India’s concerns about Chinese steel imports predate those events, the current safeguard duty follows a formal investigation that began in December 2024.
Industry experts suggest that New Delhi’s action aligns with measures considered or implemented by other countries facing similar trade pressures. “The world is impacted by Chinese imports, whether directly or indirectly,” said a senior executive at a leading Indian steelmaker in a Reuters report.
“We hope this duty helps support the industry’s margins and discourages under-priced steel shipments.”
Analysts see margin boost from Q1FY26
Brokerages were quick to react to the development.
ICICI Direct Research called the duty a “positive development” for domestic steelmakers and noted that the recovery in steel prices is likely to support margin expansion beginning in the first quarter of FY26.
YES Securities said Indian metal companies would be navigating a somewhat mixed landscape in Q4 FY25 as Trump tariffs are expected to overshadow the companies’ operational performances.
“Steel producers are benefiting from a seasonal demand uptick, a 12% safeguard duty, and the ease in coking coal prices, which should support an improvement in EBITDA/tone,” it said in a report.
Industry associations, including the Indian Steel Association—which counts JSW Steel, Tata Steel, SAIL, and ArcelorMittal Nippon Steel India among its members—have repeatedly flagged concerns about the surge in low-cost imports and lobbied for government action.
Monday’s announcement, therefore, marks a significant policy win for the domestic industry, as it prepares to navigate a complex global trade environment in the quarters ahead.
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