Indian steel stocks experienced a significant surge on Wednesday, December 31, 2025, as the government imposed a three-year safeguard duty on select steel imports. This move is designed to protect domestic manufacturers from cheaper overseas supplies and has boosted investor sentiment, leading to gains of 2-4% in the shares of major steel companies like Tata Steel, JSW Steel, and Jindal Steel.
The Ministry of Finance's notification, dated December 30, 2025, introduces a graduated import duty on non-alloy and alloy steel flat products. The safeguard duty will be levied at 12% in the first year, 11.5% in the second year, and 11% in the third year. This measure follows recommendations from the Directorate General of Trade Remedies (DGTR), which found a sudden and significant surge in steel imports posing a risk to domestic producers. The duties will primarily affect imports from countries including China, Vietnam, and Nepal, while specialty steel products like stainless steel are excluded.
The positive impact was immediately visible in early trading. Tata Steel shares climbed 2.2 percent to ₹179.7, while JSW Steel rose by 3.3 percent to ₹1,148.1. Jindal Steel and Power saw a 3.6 percent increase, trading at ₹1,057.8. Jindal Stainless also participated in the rally, gaining 2.8 percent to ₹859.7. Even NMDC, a public sector undertaking, traded marginally higher, up 0.4 percent to ₹83.7. As of December 31, 2025, Tata Steel's share price was ₹178.9. During the day's trading session, the share price moved between ₹178.69 and ₹181.40, with an average price of ₹180.05.
The safeguard duty aims to shield domestic producers from a surge in low-priced and substandard imports, strengthening pricing conditions for local mills by easing competitive pressure, particularly in flat steel products. Market participants believe the tariff will strengthen pricing conditions for local mills by easing competitive pressure from cheaper imports, particularly in flat steel products that account for a significant share of large producers' output.
This development is expected to bolster the financial performance of Indian steel manufacturers, potentially leading to improved profitability and stock valuations. For investors, it represents a significant sector-specific catalyst, enhancing pricing power and competitiveness for Indian companies.
Tata Steel, with its strong presence in the domestic flat steel segment, is expected to benefit from reduced competition and improved pricing power. The duty could support margins, enhance capacity utilization, and bring greater stability to domestic steel prices over the medium term. JSW Steel has shown impressive performance metrics, with a year-to-date return of 28.70%, outperforming the Sensex's 8.55% gain. Over a longer horizon, JSW Steel has delivered a three-year return of 51.06% compared to the Sensex's 39.41%. Jindal Steel, with a strong domestic footprint in flat and value-added steel products, stands to benefit from reduced competition from low-priced imports.
The government's decision aligns with its broader objective of ensuring fair trade practices and strengthening India's domestic steel industry. The extension of protection for a full three-year period provides greater visibility and stability for Indian steelmakers. This move is likely to improve pricing power for domestic manufacturers, support margins, and enhance capacity utilization over the medium term.
