Safeguard measures could reduce India’s steel imports by 50% in next financial year: Experts

New Delhi: India’s steel imports could reduce by 50 per cent in FY26 while domestic manufacturers’ profitability is expected to improve, if the government levies a safeguard duty on inbound shipments, experts have said.

The Directorate General of Trade Remedies (DGTR), the investigation arm of the 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 surge in imports. The final decision to impose the duty will be taken by the Finance Ministry.

The development is credit positive and expected to lead to a 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 inch up 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 the anticipation of a safeguard duty had been looming, 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 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.