The Ministry of Steel in India has temporarily adopted a “wait-and-watch” policy to assess the full impact of the Trump Tariffs. The primary concern, according to Ministry sources, is to shield the domestic steel industry from a potential supply glut and any distortion in metal prices. To address this, the Ministry is considering the introduction of safeguard duties while urging the Directorate General of Trade Remedies (DGTR) to conclude its investigation into the dumping of steel within the next 6 to 9 months.
According to officials in the know, while the Ministry had pitched for safeguard duties in the 20–25 per cent range, there is a strong possibility of a lower limit expansion. Ie., safeguard duties in the range of 15-25 per cent are being considered to prevent unfair competition and ensure a level playing field.
Implementation is expected in 6-12 months, but discussions are going on to consider 6 –9 month timeline, the official in the know said.
Some of the steel companies businessline spoke to said industry comments have been sought by the DGTR and the same has been provided.
Steel Imports Rising
India is already witnessing an influx of steel imports, mostly from FTA countries including China. Imports of finished steel stood at 8.40 MT for the April–January period (10M FY25),up 22 per cent y-o-y as against exports at 4 MT, down by 29 per cent y-o-y. Trade deficit was at 4.4 MTor at ₹36,524 crore in value terms.
According to Ritabrata Ghosh, Vice President & Sector Head, Corporate Sector Ratings, ICRA Ltd, earnings of Indian steel companies have remained under pressure due to the persistent threat of elevated cheap imports from Asian producers, especially China, Japan, and South Korea.
“With USA’s steel imports accounting for 6–7 per cent of global steel trade flows, Indian steel mills remain on tenterhooks due to the potential risk of diversion of steel trade away from USA to high-growth markets like India,” he told businessline.
The same concerns have been raised by some of the Indian integrated steel-makers who have in their meetings with the Ministry.
European ops of Indian companies
The announced Trump Tariff will have an impact on European operations of Indian steel-makers. Preferential market access for EU steel mills to US under exemption from Section 232 is scheduled to end on March 12, 2025.
Netherlands and Italy cumulatively export 0.8-1 million tonnes of steel per annum to the US. This trade flow could be impacted after the latest tariff measure announced by the US.
“Indian steel companies have presence in Netherlands and Italy and this reduced market access to US is directionally negative for them,” Ghosh said.
According to Abhyuday Jindal, MD, Jindal Stainless, the country’s largest maker of the alloy, withdrawal of all quotas on steel comes with a set of “opportunities and challenges”.
“On one hand, it will in a way help to create a level-playing field to India between various overseas players in the US market,” he said, pointing out that India was at a disadvantage compared to Japan, Korea, and the EU, as they benefited from quota-based exemptions.
On the other hand, challenges of this policy announcement include reduced market access in the US for major players like Japan, Korea, and EU, and thereby will result in diversion of trade flows to India.
In a previous interview to businessline, TV Narendran, MD and CEO, Tata Steel said Trump Tariffs will have an impact on European business. The company sells about a million tonnes of steel from Europe to the US. But a lot of those items are not made in the US.
“Our customers there (in the US) want us to supply the metal, because they don’t have an option to buy it locally. Customers there cover sectors like automobiles and packaging. And in packaging, a lot of that steel is not made in the US. So, somewhere that’s a call which we would like to take with our customers there,” he said.
