STEELY DEFENCE

With cheap imports flooding the market, India moves to shield its steel industry — again. Will the safeguard duty fuel capacity expansion?

- ISHITA AYAN DUTT

The "weaponisation" of economic activity — through tariffs and sanctions — is now a reality, with countries leveraging these tools strategically, External Affairs Minister S Jaishankar said at the Raisina Dialogue recently.

Speaking at the strategic affairs conference hosted by the external affairs ministry and the Observer Research Foundation in New Delhi, Jaishankar emphasised that India would have to negotiate the best possible deals because "governments fight for their businesses". He added, "You're fighting for your comprehensive national power, of which business makes a very important contribution."

An example of this fight for businesses was demonstrated last week, when the Directorate General of Trade Remedies (DGTR), under the commerce and industry ministry, recommended a 12 per cent safeguard duty for 200 days on certain steel products. The measure aims to protect the domestic steel industry from "serious injury" caused by a surge in imports. The recommendation now awaits approval from the Department of Revenue in the finance ministry.

Significance of steel

Steel is the backbone of an economy, serving as a critical input for infrastructure, construction, automotive, defence, and manufacturing industries. As India grows, so will the demand for steel.

Producers like JSW Steel, Tata Steel, ArcelorMittal Nippon Steel India (AM/NS India), and Jindal Steel and Power (JSPL), which are at the forefront of a private-sector capital expenditure push, have aligned their plans with India's target of achieving a 300 million tonne (mt) steel production capacity.

According to Icra estimates, Tata Steel, JSW Steel, AM/NS India, JSPL, and public sector NMDC Steel would add 50 mt of capacity between FY21 and FY28, of which 37.1 mt was added by FY24.