Safeguard Measures Will Cut India's Steel Imports By 50% In FY26: Experts

Last December, the DGTR started an investigation into the sudden surge in imports of 'non-alloy and alloy steel flat products', used in various industries, including fabrication, pipe making, construction, capital goods, auto, tractors, bicycles, and electrical panels

India's steel imports could reduce by 50 per cent in FY26 while domestic manufacturers' profitability is expected to improve, provided the government levies a safeguard duty on inbound shipments, was an opinion shared by many experts.

The Directorate General of Trade Remedies (DGTR), the investigation arm of the Union Commerce ministry, has recommended imposition of a 12 per cent provisional safeguard duty for 200 days on certain steel products with an aim to protect domestic players from a surge in imports. The Finance ministry will take the final call on this issue. The development is credit-positive and is expected to lead to 50 per cent reduction in India's steel imports in FY26, said Girish Kadam, senior vice-president and Group Head (Corporate Sector Ratings) at ICRA Ltd.

With imports slated to materially decline, and domestic demand poised to grow at a healthy rate of 7-8 per cent in FY26, ICRA expects the industry's capacity utilisation to rise to a more comfortable level of 83 per cent in FY26 from the four-year low of 78 per cent being witnessed in the current fiscal, he said.

Dhruv Goel, CEO of markets research firm BigMint, said that the safeguard duty move has been in anticipation for quite some time but with the recommendation of 12 per cent duty, the market now has clarity on the landed price implications for upcoming imports. "The immediate market reaction could see prices rise by Rs. 1,000-1,500 per tonne in the near term. The imposition of the safeguard duty is likely to reduce import volumes, creating opportunities for domestic mills to enhance profitability in the upcoming quarter," he said. Sehul Bhatt, Director (Research), Crisil Intelligence, said that the imposition of provisional safeguard duty on some non-alloy and alloy steel flat products will provide pricing support to local manufacturers in the first half of fiscal 2026.

The announcement comes amid evolving trade dynamics, where some countries have imposed restrictions on imports of steel.

Meanwhile, India Ratings and Research (Ind-Ra) has said that the government has initiated a safeguard duty investigation on certain steel products to protect domestic players from low-cost imports. However, if safeguard duties are implemented, they could provide tailwind to the prices.

Last December, the DGTR started an investigation into the sudden surge in imports of 'non-alloy and alloy steel flat products', used in various industries, including fabrication, pipe making, construction, capital goods, auto, tractors, bicycles, and electrical panels.

The investigations were conducted following a complaint from the Indian Steel Association on behalf of its members, including ArcelorMittal Nippon Steel India, AMNS Khopoli, JSW Steel, JSW Steel Coated Products, Bhushan Power & Steel, Jindal Steel and Power, and SAIL.

The directorate has preliminarily found that there is a recent, sudden, sharp and significant increase in the imports of these products into India, causing and threatening to cause serious injury to the domestic industry and producers. The directorate has said in a March 18 notification that there exist critical circumstances, where any delay in application of provisional safeguard measures would cause damage which would be difficult to repair. It said there is a necessity for immediate application of provisional safeguard measures.