Implementation of Safeguard Duties on Indian Steel: UPSC Current Affairs Story Arc

Overview

This arc tracks the Indian government's systematic use of trade remedial measures to protect the domestic steel industry from a surge in cheap imports. It began with an emergency announcement in March 2025, followed by a 200-day provisional duty effective from April 21, 2025. By January 2026, the government transitioned this into a 'definitive safeguard duty' structure. This multi-year plan involves a declining rate (12% to 11%), signaling a 'liberalization' phase intended to give domestic manufacturers like SAIL and TATA Steel time to become competitive while complying with WTO norms that mandate such duties be progressively relaxed.

How This Story Evolved

Initial imposition announced (March 2025) → Provisional 12% duty notified effective April 21 (April 2025) → Definitive declining duty structure finalized, maintaining the April 21 start date (Jan 2026)

1. 2025-03-20: India Imposes Safeguard Duty on Steel Imports
   More details

   UPSC Angle: India imposes 12% safeguard duty on certain steel imports.

   Key Facts:

   • Safeguard Duty: 12%
   • Product: Certain steel imports
   • Objective: Protect domestic steel producers
2. 2025-04-22: India Imposes Tariff on Steel Imports
   More details

   UPSC Angle: India imposes 12% safeguard duty on select steel imports.

   Key Facts:

   • Tariff imposed: 12%
   • Effective date: April 21, 2025
   • Duration: 200 days
   • Objective: protect domestic steel industry
3. 2026-01-01: Safeguard Duty on Steel Flat Products
   More details

   UPSC Angle: Safeguard duty imposed on steel flat products.

   Key Facts:

   • Safeguard duty on steel flat products (HTS 7208-7212, 7225-7226)
   • 12% from April 21, 2025, to April 20, 2026
   • 11.5% from April 21, 2026, to April 20, 2027
   • 11% from April 21, 2027, to April 20, 2028

Genesis

Trigger

The initial imposition announcement on March 20, 2025, where a 12% safeguard duty was first declared to protect domestic producers.

Why Now

A sharp rise in 'steel flat products' imports was causing serious injury to local mills, necessitating immediate provisional protection under the Customs Tariff Act.

Historical Context

India has historically used safeguard and anti-dumping duties to counter 'predatory pricing' or 'import surges' particularly from FTA partners or countries with excess capacity like China.

Key Turning Points

1. [2025-04-21] Effective date of the 12% provisional duty

   It provided the first legal enforcement date for the tariff, which would later be used as the anchor date for the 3-year definitive structure.

   Before: No extra tariff. After: 12% additional cost on specific steel flat products for 200 days.

2. [2026-01-01] Notification of the declining definitive duty structure

   It converted a short-term emergency measure into a predictable 3-year industrial policy.

   Before: Uncertainty after the 200-day provisional period. After: Clear 3-year tariff roadmap until April 2028.

Key Actors and Institutions

Key Institutions

• Directorate General of Trade Remedies (DGTR)
• World Trade Organization (WTO)
• Central Board of Indirect Taxes and Customs (CBIC)

Key Concepts

Safeguard Duty

A trade remedy measure applied when a sudden surge in imports causes or threatens serious injury to the domestic industry.

Current Fact: Initial 12% duty imposed on steel flat products (HTS 7208-7212) on March 20, 2025.

Provisional Duty

An interim tariff imposed during an ongoing investigation to provide immediate relief, limited by law to a specific duration.

Current Fact: The 12% provisional duty was notified for a duration of 200 days starting April 21, 2025.

Definitive Duty Structure

The final tariff rates established after a full investigation, often featuring a 'degressive' scale to encourage domestic efficiency.

Current Fact: Finalized on January 1, 2026, with a reduction schedule: 12% (2025-26), 11.5% (2026-27), and 11% (2027-28).

What Happens Next

Current Status

As of January 1, 2026, the duty has been codified into a three-year definitive structure starting from the retrospective date of April 21, 2025.

Likely Next

Monitoring of import volumes to see if the 0.5% annual reduction (12% to 11.5%) remains sustainable for domestic players.

Wildcards

A challenge at the WTO Dispute Settlement Body by major steel exporters or a sudden global commodity price crash that renders the 11% duty insufficient.

Why UPSC Cares

Syllabus Topics

• Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth

Essay Angles

• The tightrope walk between protectionism and free trade in a globalized economy.
• Self-reliance (Atmanirbharta) vs. WTO commitments in India's industrial strategy.

Prelims Likely: Yes

Mains Likely: Yes

Trend Signal: rising

Exam Intelligence

Previous Year Question Connections

• Testing trends in India's merchandise imports including iron and steel. — Directly relates to the surge in steel imports that triggered this safeguard action.
• Safeguard mechanisms for developing countries in the WTO Nairobi Package. — Highlights the legal framework under which India imposes these 12% duties.

Prelims Angles

• Difference between Safeguard Duty (volume surge) and Anti-dumping Duty (price dumping).
• HTS codes 7208-7212 specifically refer to iron and non-alloy steel flat products.
• Statutory duration of provisional safeguard duties (usually 200 days in India).

Mains Preparation

Sample Question: Critically analyze the impact of definitive safeguard duties on India's steel sector. How do such measures align with India's commitments under the WTO framework?

Answer Structure: Intro: Define Safeguard Duty and the 12% to 11% structure → Body 1: Why it's needed (import surges, injury to domestic manufacturers) → Body 2: WTO Compliance (Liberalization through declining rates, time limits) → Critical Analysis: Impact on MSME steel users (input costs) vs. primary producers → Conclusion: Balancing industrial protection with export competitiveness.

Essay Topic: Protectionism: A necessary evil for developing economies or a barrier to global efficiency?

Textbook Connections

Key Takeaway

This arc exemplifies the 'degressive' nature of trade remedies, where India uses a 12% to 11% declining duty to shield steel producers while satisfying WTO requirements for progressive liberalization.

All Events in This Story (3 items)

1. 2025-03-20 [Economy] — India Imposes Safeguard Duty on Steel Imports
   On March 20, 2025, India imposed a 12% safeguard duty on certain steel imports to protect domestic producers from cheaper foreign steel. This move aims to support local steel manufacturers against international competition.
   More details

   UPSC Angle: India imposes 12% safeguard duty on certain steel imports.

   Key Facts:

   • Safeguard Duty: 12%
   • Product: Certain steel imports
   • Objective: Protect domestic steel producers
2. 2025-04-22 [Economy] — India Imposes Tariff on Steel Imports
   The Government of India has imposed a 12% provisional safeguard duty on select steel imports, effective April 21, 2025, for 200 days. This measure is aimed to protect the domestic steel industry.
   More details

   UPSC Angle: India imposes 12% safeguard duty on select steel imports.

   Key Facts:

   • Tariff imposed: 12%
   • Effective date: April 21, 2025
   • Duration: 200 days
   • Objective: protect domestic steel industry
3. 2026-01-01 [Economy] — Safeguard Duty on Steel Flat Products
   A safeguard duty has been imposed on steel flat products (HTS 7208-7212, 7225-7226) to protect domestic industries from a surge in imports, with rates of 12% from April 21, 2025, to April 20, 2026; 11.5% from April 21, 2026, to April 20, 2027; and 11% from April 21, 2027, to April 20, 2028.
   More details

   UPSC Angle: Safeguard duty imposed on steel flat products.

   Key Facts:

   • Safeguard duty on steel flat products (HTS 7208-7212, 7225-7226)
   • 12% from April 21, 2025, to April 20, 2026
   • 11.5% from April 21, 2026, to April 20, 2027
   • 11% from April 21, 2027, to April 20, 2028