India plans to impose a 12% “safeguard duty” on certain steel products for 200 days to protect its domestic industry from “serious injury” caused by a sharp increase in imports.

While the move was welcomed by domestic manufacturers, it has raised concerns among manufacturing industries about rising costs.

This decision comes as India faces the repercussions of comprehensive US tariffs on steel and aluminum. Experts have urged closer economic cooperation between India and China to counterbalance the effects of US protectionism.

The Directorate General of Trade Remedies, the investigative arm of the Indian Ministry of Commerce and Industry, stated that the imposition of a temporary 12% safeguard duty is “appropriate to eliminate the serious injury and threat” to the domestic industry.

The agency, according to Reuters, invited comments on its findings within 30 days, after which an oral hearing will be held, after which a final decision will be made.

Abhishek Dayal, Assistant Director General of the Ministry of Commerce, said, “This is a recommendation; the final decision will be taken by the Federal Ministry of Finance, and it will take a few days to come into effect.”

TV Narendran, CEO and Managing Director of Tata Steel, one of India’s largest steelmakers, supported the proposed new import tax, saying, “We welcome the decision and appreciate the government’s support.”

AS Feroz, former chief economist at the Economic Research Unit of the Indian Ministry of Steel, said the proposed safeguard duties would benefit domestic steel producers but would also raise costs for downstream industries.

Feroz added that sectors such as automobiles, shipbuilding, and construction would suffer if the new tariffs were implemented.

Guo Xuetang, director of the Research Center for South Asian and Indian Ocean Studies at Shanghai University of International Business and Economics, said the 12% tariff is a natural response from India to US protectionism.

Guo added that Indian Prime Minister Narendra Modi hopes this move will boost the competitiveness of local companies, while sending a signal to the world that the country is capable of protecting its industries.

While some believe that tariffs could impact Chinese steel exports to India, Guo said he believes this is unlikely, as India still needs high-quality, cost-effective Chinese steel for infrastructure projects, such as bridge construction.