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Tata Steel pushes for tariff extension as Indian steel industry faces surge in imports
India’s steel industry is pressing the government to act with urgency. In a direct appeal, Tata Steel – one of India’s largest steel makers – has asked the government to extend import tariffs on certain steel products, citing the threat of rising cheap imports and the need to protect the domestic industry.
The ask and its context
Tata Steel’s Chief Executive Officer, T.V. Narendran, said that although import volumes into India remain “limited”, even small volumes of cheap foreign steel can have a disturbing effect on the domestic market. He singled out China, saying that Chinese producers are exporting “a lot of steel” and that Indian producers are finding it hard to compete because many global markets are already “flooded” by Chinese steel.
Earlier in April, India imposed temporary safeguard duties on some steel imports. But those duties have recently expired, and Tata Steel is urging the government to step in with a fresh or extended measure.
Why this matters
India is the world’s second-largest crude steel producer, but it has also become a significant importer of finished steel products. With domestic demand strong (driven by auto, construction, railways and oil & gas sectors) but margins under pressure, the industry argues that unchecked imports can undermine investment, discourage capacity expansion and impact jobs.
For Tata Steel specifically, the appeal is more than just about volume: it is about the price-undercutting and margin erosion resulting from cheaper foreign steel. As Narendran put it, “even small volumes disturb the market”. That suggests that the issue is not just about mass imports but competitive dynamics: foreign suppliers may be willing to sell at low prices, knowing they have vast scale or subsidised cost structures. (On a previous occasion he said Chinese steel exports were “unfairly priced”.)
Government – past and present policy
The Indian government has already engaged with the problem. Earlier in 2025, the agency in charge of trade remedies (Directorate General of Trade Remedies – DGTR) recommended a provisional safeguard duty of ~12% on certain steel product imports for 200 days. Further, in August 2025 the DGTR recommended a longer-term tariff regime of 11-12% for three years on some steel products, in response to a “sharp increase” in imports.
So Tata Steel’s ask comes at a moment when the protective measures are either expiring or under review, and when the domestic industry is signalling stress.
What Tata Steel is facing – and what it wants
From the company’s perspective:
- Import competition: Chinese steel, among others, is flooding markets globally and putting pressure on Indian mills. Narendran notes that Indian producers simply don’t have the same export opportunities because many markets are already saturated.
- Margin pressure domestically: The company expects domestic steel prices in Q3 to be about Rs 1,500 per tonne lower than Q2, reflecting softening pricing amid global pressure.
- Geographic exposure: Tata Steel’s European and UK operations are facing tariffs in the U.S., which are hurting their exports, emphasising that global trade tensions are multi-faceted for the company.
Accordingly, the company is urging the Indian government to extend the import tariffs on selected steel products. The extension would aim to give the domestic industry a “level playing field” and time to adjust, invest and expand.
Potential benefits and risks
Benefits:
- Protective tariffs could help stabilise domestic prices for steel, helping Indian producers maintain margins and deem investments feasible. Some analysts believe the 12% provisional duty earlier could lift steel prices by Rs 1,500-2,000 per tonne.
- It could signal to investors and the industry that the government is ready to back domestic manufacturing, aligning with India’s broader “make in India” and self-reliance goals.
- Downstream sectors (construction, auto, infrastructure) could benefit long-term from a stable domestic steel sector with predictable suppliers.
Risks/downsides:
- For downstream consumers of steel, higher tariffs or restricted imports could raise input costs, which could pass through to construction costs, automotive parts prices, etc.
- There’s a risk of trade retaliation or disputes, especially if major exporting countries view the tariffs as disproportionate or discriminatory.
- The protective measure might delay structural reforms in the domestic industry (e.g., cost reduction, productivity improvement, decarbonisation) if companies rely on government shield rather than internal efficiency.
- If domestic demand slows (due to macro-economic reasons) the tariffs could lead to domestic over-capacity or inefficiency.
Outlook and what to watch
In the coming weeks and months, several key developments will be important:
- Whether the government formally announces an extension or renewal of tariffs on selected steel products, and if so: the exact rate, duration, and product scope.
- How quickly the domestic sector (Tata Steel and others) respond — whether they increase domestic manufacturing investment, expand capacity, or speed up decarbonisation efforts.
- How downstream sectors react: whether steel producers are able to pass through higher prices, or whether input cost pressures emerge.
- Global trade flows: how other countries – particularly China, South Korea, Japan – respond, and whether more steel is diverted into India as other markets become tighter. Some sources warn that India may still become a dumping ground for cheap steel flows.
- Longer-term structural issues: government attention to raw material supply, decarbonisation in steel production, and improving competitiveness of Indian steel mills (rather than relying only on tariffs). For example, the Indian government is considering restrictions on imports of raw materials such as low-ash met-coke.
In conclusion
Tata Steel’s call for extended import tariffs marks a significant moment in India’s steel sector story. On one hand, it reflects the pressures domestic producers face amid escalating global competition, especially from China’s huge surplus capacity. On the other, it underscores how trade and industrial policy in India is shifting: not just tariff reductions or open trade, but more calibrated protection as India weighs its manufacturing ambitions and domestic strategic interests.
But the path ahead isn’t simple. Tariffs can provide breathing room, but they are not a substitute for competitiveness, cost control, and innovation. For India’s ambition to become a global steel powerhouse — and for Tata Steel to remain a leader in that space — the protective measures must be paired with investment and structural reforms. The next government decision on tariffs will be critical in shaping whether the domestic industry simply survives, or thrives.
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