India Slaps 12% Steel Tariff to Shield Homegrown Industry From Chinese Flood

India’s government is taking aim at what it sees as a steel invasion. A new 12% temporary tariff is now in place to put the brakes on cheap Chinese imports that have been squeezing the country’s mills and unsettling the job market.

The move signals more than just trade tensions—it’s a loud message from New Delhi that it won’t sit back while local manufacturers struggle to stay afloat. With job cuts looming and domestic plants throttling output, something had to give.

Domestic Steelmakers Cry Foul, Government Steps In

For months, Indian steel producers have sounded the alarm over rising volumes of low-cost Chinese steel swamping the market. Many said they were being forced to operate below capacity, some even warning of layoffs.

It wasn’t just corporate complaints either. Industry lobbies and state governments began pushing for intervention, urging New Delhi to do something—fast.

Now, they got their answer: a 12% tariff applied temporarily, a safeguard duty aimed at giving the homegrown players a chance to catch their breath.

Why China? Why Now?

China is the world’s biggest steel producer and has faced a demand slump at home. So, excess output found its way into international markets, including India—currently the world’s second-largest producer.

As per government data, Chinese-origin steel imports into India surged over 35% in the last financial year.

That’s a big jump. But it’s not just the volume that worries Indian firms—it’s the pricing. Many of these imports are reportedly priced below local cost levels, creating an uneven playing field.

For policymakers in New Delhi, this is less about economics and more about national interest. Losing steel jobs in cities like Bhilai or Jamshedpur could ripple politically.

What the New Tariff Covers

The 12% tariff won’t hit all imports. Instead, it targets specific steel categories that showed the steepest rise in inbound shipments.

Here’s a quick breakdown of what’s affected:

• Hot-rolled and cold-rolled coils

• Galvanized steel sheets

• Certain stainless steel products

These items were identified as undercutting Indian prices the most, according to a trade ministry memo accessed by Reuters.

One industry executive called it “surgical and overdue.”

Global Trade Ripple Effects

India isn’t alone in slapping steel curbs. Countries like the U.S., Vietnam, and Brazil have also ramped up protectionist policies in recent months.

According to the World Steel Association, more than 18 new trade measures were introduced globally in Q1 2025 alone.

Here’s how India stacks up with its steel measures:

The common denominator? Chinese steel.

What’s the Market Saying?

Steel prices on domestic exchanges rose nearly 2% after the announcement. Shares of Tata Steel and JSW Steel also edged higher, with some analysts predicting better margins in Q2.

Investors are betting that the move could lead to better utilization rates and perhaps even new investments if demand stays steady.

Import-dependent construction firms worry the tariff will increase input costs and delay infrastructure timelines.

A Short-Term Fix or Start of a Trend?

The term “temporary” has raised a few eyebrows. The safeguard duty is initially meant to last 200 days—but sources in the steel ministry say that’s subject to review.

There’s talk of extending the tariff or even formalizing it into a broader trade policy if Chinese exports continue to rise.

One steel analyst said, “Temporary rarely means short-lived in Indian trade policy. This could stick around well into next year.”

The Jobs Factor Can’t Be Ignored

The steel sector directly employs over 2.5 million people in India, according to the Ministry of Steel. That number doesn’t include indirect jobs in mining, transport, or infrastructure.

Layoffs in this sector could be politically risky ahead of state elections in several steel-heavy regions like Chhattisgarh and Odisha.