GTRI Report Highlights Risks of Steel Import Restrictions

January 2025 – The Global Trade Research Initiative (GTRI) has published a report titled "The Hidden Costs of Steel Import Restrictions," analyzing the economic impact of proposed safeguard duties on "Non-Alloy and Alloy Steel Flat Products." The report emphasizes the need for balanced policies to protect India’s economic and industrial welfare.

Key Findings:

Steel imports make up just 6% of India’s domestic production, addressing gaps in specialized grades not manufactured locally. These imports, primarily from South Korea, Japan, and China under free trade agreements (FTAs), are vital for industries like automotive, infrastructure, and manufacturing.

Proposed safeguard duties could raise import costs, disrupt supply chains, and increase production costs for downstream industries, including small and medium enterprises (SMEs). Higher prices may delay infrastructure projects and impact India’s global competitiveness.

Despite these concerns, Indian steelmakers maintain healthy profit margins, suggesting no significant injury from imports. The report attributes challenges to inefficiencies within the domestic industry rather than external competition.

Recommendations:

The report calls for detailed studies on import measures, simplification of import processes, and reforms in the Quality Control Order (QCO) system. It advocates targeted protections for competitively produced products while ensuring affordable steel imports to support India’s growth.

GTRI stresses that restrictive policies may undermine the "Make in India" initiative, urging policymakers to prioritize economic stability over protectionism.