This decision arises from concerns about the viability of local steel manufacturers, especially small and medium-sized businesses.

Set to last for 200 days, the tariff was recommended by the Directorate General of Trade Remedies (DGTR) after their investigation revealed that the sharp rise in steel imports was negatively impacting domestic producers, leading some to reduce production and contemplate layoffs.

During the 2024/25 fiscal year, India’s steel imports reached a nine-year peak of 9.5 million metric tons, marking the second straight year the nation has been a net importer. Industry experts have reported that Chinese steel, often sold below production costs, has inundated the Indian market, adversely affecting local manufacturers.

Prominent Indian steel companies, such as Tata Steel, JSW Steel, the Steel Authority of India, and ArcelorMittal Nippon Steel India, have expressed support for the tariff. A spokesperson for JSW Steel highlighted that the safeguard duty is essential for creating a fair competitive environment, providing local players the opportunity to recover and maintain jobs.

The Ministry of Finance is set to officially announce the tariff in the coming days, which will be published in the official gazette.

This action has faced criticism internationally, especially from China, with analysts in Beijing calling it a protectionist measure that could strain trade relations between the two countries.

Nevertheless, Indian officials have defended the decision, emphasizing that it aims to ensure fair trade practices and protect the nation's industrial foundation, and is not intended to single out any nation. India is among several countries tightening regulations on steel imports due to concerns about global oversupply and dumping, which is likely to affect international pricing and trade dynamics in the steel industry in the near future.