India Mulls 20% Safeguard Duty to Counter Chinese Steel Dumping Amid US Tariff Surge

As the U.S. ramps up its trade war with China by slapping a massive 125% tariff on Chinese imports, India is now considering its countermeasure: a 20% safeguard duty on steel imports. The move aims to shield domestic steelmakers from a potential flood of cheap Chinese steel redirected toward India.

The U.S. tariff hike, effective April 9, raised levies from an existing 104% to a staggering 125%, including a 50-percentage-point jump. The aggressive escalation has sparked global concerns that China, facing restricted access to the American market, may offload surplus steel into other countries, including India.

India’s Steel Ministry, alarmed by the risk, is actively reviewing recommendations from the Directorate General of Trade Remedies (DGTR), which recently proposed a 12% provisional duty for 200 days on imports from China and Vietnam. Officials confirm that discussions are underway to potentially raise that to 20% as a more robust safeguard.

“The fear of Chinese steel flooding India at below-cost prices is real and already happening,” a senior government official said. China’s frequent use of ASEAN routes to bypass restrictions is also under close watch.

India’s steel sector is already showing signs of strain. In FY25, finished steel imports surged to a 10-year high of 9.5 million tonnes (mt), while exports dropped to a decade-low of 5 mt. This has made India a net steel importer for the second year in a row, and the third time in a decade.

The DGTR’s recommendation exempts most developing nations, but not China and Vietnam. Officials say the 12% duty could be implemented soon, followed by monitoring and potential revision. “We’re discussing implementing the 12% duty first, watching its impact, and then adjusting after further review,” a second official said.

The final decision lies with the Finance Ministry, which is expected to act swiftly as pressure mounts from domestic steel producers. The Steel Ministry has yet to issue an official response.