Shares of leading steel makers Jindal Steel, SAIL, Tata Steel, JSW Steel and JSL are sharply higher in early trade on August 18, after the Directorate General of Trade Remedies (DGTR) recommended a three-year safeguard duty on imports of some categories of flat steel products in order to protect the domestic industry from rising imports.

The Nifty Metal index is higher by over 1.2 percent in early trade, led by Jindal Steel and SAIL, which are up by close to 2 percent.

Once approved by the Finance Ministry, the safeguard duty will kick in at 12 percent in the first year, followed by 11.5 percent in the second year, and 11 percent in the third year. DGTR said the decision is due to a surge in steel imports, especially from China, along with a steep fall in domestic industry profits.

A provisional 12 percent duty was already in place, imposed on April 21, 2025, and now, in the final order, DGTR has said that imports have risen 'recently, suddenly, sharply and significantly' between October 2023 to September 2024. This threatens to cause "serious injury to the domestic industry/producers," the DGTR notification said. The current duty of 12 percent was to be in force till the end of September, and the imposition of the latest import levy is being seen as a positive move by the steel industry.

The import duty has been recommended by the DGTR in its final report on a probe initiated following a complaint by the Indian Steel Association. The enquiry, initiated in December 2024, ranged across products like hot-rolled and cold-rolled steel, metallic and colour-coated steel.

The Alloy Steel Producers Association of India (ASPA), representing players like Tata Steel and JSW Steel, had filed a petition on July 31, claiming that cheap imports from China were adversely affecting the industry. Another association, Indian Stainless Steel Development Association (ISSDA) too had filed an application with the DGTR to investigate the dumping of stainless steel items in the domestic market.

However, trade think tank Global Trade Research Initiative (GTRI) has cautioned against the move to impose duty on Chinese import, stating that it will "raise input costs, hurt export competitiveness, and squeeze downstream users." The GTRI argued that the rise in imports was predictable and not 'sudden', and the domestic impact was being overstated. The safeguard duty on steel imports could cripple automotive, engineering, and construction sectors by increasing input costs, GTRI said in its note.

GTRI added that more than 250 stakeholders - including automakers and electronics companies had opposed the duty, warning of higher input costs and an impact on export competitiveness.

The sentiment in steel stocks was also helped by the announcement by JSW Steel that it is has signed a non-binding agreement South Korea’s POSCO Group to explore setting up a six million tonnes per annum (MTPA) integrated steel plant in India.