Steels prices are set to rise? To shield domestic manufacturers from foreign competition, India is getting ready to impose a 12% tariff on most steel imports. This safeguard measure is being implemented by the world’s second largest steel producer for 200 days in order to stop low cost imports that are threatening domestic industries.
The Union Ministry of Commerce and Industry has on Tuesday published the gazette notification for inviting the comments of the public before arriving at a final decision. The government explained: “There are certain circumstances that are so unusual that any delay in putting in place safeguard measures would lead to harm that is irreparable”.
This move is expected to benefit major Indian steel players like Jindal Steel and Power and JSW Steel, who have been urging the government to intervene against cheap imports from China. There is import tax on the way as the world turns its attention to global trade tensions, including the impact of tariff policies of President Donald Trump, which have sparked fears of tariff wars that could last years.
India is following the path of countries like Saudi Arabia, Vietnam and Chile that have put in place protective measures against Chinese steel. Although production has been cut, China still has surplus steel that it exports to other markets, causing price distortions.
Another Asian steel producing nation and a fast growing one, Vietnam, is also facing issues as a result of steel oversupply. The Indian government’s latest action shows that nations are increasingly trying to defend their domestic industries from what they claim are unfair trade practices.
The ministry pointed out that safeguard measures are required when there are increased and unfavorable and unforeseen imports which are likely to cause substantial harm to the domestic industry. With this temporary duty, India is trying to stabilize its steel sector and prevent further disruption form global supply chain fluctuations.
