At the third India-Japan Steel Dialogue in New Delhi this week, Japan asked India to exempt it from a proposed safeguard duty that India is considering to curb the flow of steel imports. The request, which is aimed at protecting supplies of specialty steel alloys essential to Indian industries, was made.

A probe into whether India should impose a temporary tax on steel imports, known as safeguard duty, began in December. Indian Steel Minister H.D. Kumaraswamy confirmed last month that the investigation was still ongoing. The Japanese delegation, comprising government and industry officials, argued that their steel products are essential to meet India’s demand for high-performance steel, which cannot be adequately met by domestic production in terms of quantity and quality.

The Japanese delegation’s presentation highlighted the indispensability of Japanese steel to Indian consumers and asked for Japan to be exempt from any such duty.

The Japanese embassy in India and the Japan Iron and Steel Association have already reached out to India’s commerce and steel ministries, urging them not to impose a temporary tax on steel imports, according to letters and documents cited by one of the sources.

The push for country-specific restrictions comes amid concerns over excess capacity in China and the ASEAN region, which has led to increased imports to India.

Cheap imports, especially from China, have put pressure on India’s small steel mills, leading to scaling back operations and possible job cuts, as reported in December.

India’s imports of manufactured steel hit a six-year high in the first nine months of the fiscal year starting April 2024, with imports from Japan hitting their highest in at least seven years and nearly doubling from a year earlier.

Japan, China and South Korea together accounted for 79% of India’s total manufactured steel imports in the April-December period, with Japan alone accounting for nearly a quarter.