India's Unemployment Rate Falls to 5.2% in July

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A Strategic Shield for Domestic Industries

On August 16, 2025, the Directorate General of Trade Remedies (DGTR), under India’s Ministry of Commerce, issued its final recommendation to levy a three-year safeguard duty on imports of certain flat steel products. The proposed tariff structure is phased, starting at 12% in year one, tapering to 11.5% in year two, and settling at 11% in year three.

Background & Rationale

The DGTR’s recommendation followed a surge in steel imports that has been deemed extremely detrimental to domestic producers. The notification cited a "recent, sudden, sharp and significant increase in imports" that risks inflicting serious injury on India's steel sector.

This long-term recommendation builds on a temporary safeguard duty, which the government enacted in April 2025. That provisional 12% tariff, applied for 200 days, was aimed at quickly alleviating import pressures and safeguarding local producers.

Market Response

Major Indian steelmakers—including Tata Steel, JSW Steel, SAIL, and JSPL—received the recommendation positively. On August 18, their shares climbed up to 3%, reflecting investor optimism surrounding the expected stabilization of competitive dynamics and relief from import influx.

Industry Mixed Reactions

While the Indian Steel Association (ISA), which spearheaded the petition for protective measures, welcomed the move, concerns emerged from downstream industries. Critics argue that heightened tariffs might inflate input costs, disrupt supply chains, and erode export competitiveness.

Broader Trade Context

India's protective stance is a reaction to an oversupplied global steel market. The DGTR pointed to the 50% U.S. tariffs on steel, among other trade hurdles, which have accumulated excess inventories worldwide—some of which are being redirected to India.

Compounding the situation, India is also addressing unfair pricing through other safeguards. On August 14, 2025, the government imposed anti-dumping duties on hot-rolled flat alloy and non-alloy steel from Vietnam, following an investigation that confirmed injury to domestic producers.

Furthermore, the Alloy Steel Producers Association of India (ASPA) filed an anti-dumping petition on July 31, targeting cheaply priced alloy steel wire rods from China, used prominently in automotive applications.

What Lies Ahead

• The Central Government will now assess the DGTR recommendation before enacting the final safeguard duty.


• Stakeholders across sectors—from steelmakers to auto manufacturers—will closely monitor the policy's cascading effects on pricing and competitiveness.


• The move is also expected to influence India’s broader trade posture, especially amid escalating global trade tensions.

In Summary

India’s DGTR has proposed a phased, three-year safeguard duty on selective flat steel imports to protect its domestic steel industry from sudden surges, particularly from China and other major exporters. Market sentiment has brightened, though downstream industries raise concerns about cost pressures and supply constraints. This measure is part of a broader trade safeguard effort, including anti-dumping actions, reinforcing India's resolve to shield critical industries.