Shares of leading steel manufacturers, including JSW Steel, Tata Steel, Jindal Steel and Power, and Steel Authority of India (SAIL), saw significant gains of up to 2% on Monday, December 23, as the Indian government launched an investigation into a surge in imports of certain steel flat products. JSW Steel saw its shares rise by 2%, trading at ₹935.45 per share on the NSE, while Tata Steel also climbed 2% to ₹143.42. Similarly, SAIL experienced a 1.5% increase, trading at ₹117.94 per share. This rally follows a key development: the Directorate General of Trade Remedies (DGTR), under the Ministry of Commerce, initiated a probe into the alleged surge in imports of Non-Alloy and Alloy Steel Flat Products, which are widely used in industries such as construction, automobile, pipes, capital goods, and electrical panels.
The investigation was spurred by a formal complaint from the Indian Steel Association (ISA), which represents prominent industry players, including ArcelorMittal Nippon Steel India, JSW Steel, Jindal Steel and Power, and SAIL. The ISA has requested the imposition of safeguard duties on these imports, citing a “sharp, sudden, and significant” rise in steel imports, which, they allege, have caused “significant injury” to the domestic industry. In their application to the DGTR, the ISA claimed that the increase in imports has had a damaging impact on the domestic steel sector, particularly affecting the production of non-alloy and alloy steel flat products. These products are critical to multiple sectors, including fabrication, auto manufacturing, tractor production, and bicycle manufacturing, and any disruption in supply or unfair pricing can harm India’s domestic producers. The DGTR will examine import data from October 2023 to September 2024 and review the broader trend from 2021 to 2024 to determine the cause of the spike and the degree of injury to the Indian industry.
The inquiry will assess whether the safeguard measures, including potential duties or quantitative restrictions, are necessary to level the playing field and protect domestic manufacturers from injury caused by the rising imports. In previous sessions, steel stocks had been under pressure due to the increasing import volumes. However, the start of the government probe has sparked optimism among investors that protective measures, such as safeguard duties, could offer relief to the sector by curbing the influx of cheaper imported steel products. Safeguard duties, which are in line with World Trade Organization (WTO) rules, are trade remedies used by member countries when a sudden increase in imports threatens domestic industries. If imposed, these duties would provide a temporary buffer to the domestic steel industry, ensuring a fairer competitive environment.
