Shares of Tata Steel climbed over 2% in Wednesday’s session, December 31, as steel stocks moved higher following the government’s decision to impose a safeguard duty on the import of select steel products, aimed at protecting domestic manufacturers from cheaper overseas shipments.
The stock gained in early trade as investors reacted positively to the Ministry of Finance’s notification imposing a three-year safeguard duty on non-alloy and alloy steel flat products, a move expected to ease pricing pressure on Indian steelmakers.
What is driving Tata Steel shares higher?
On December 30, the government announced a graduated safeguard duty based on recommendations by the Directorate General of Trade Remedies (DGTR). The duty will be levied at 12% in the first year, 11.5% in the second year, and 11% in the third year. It covers products such as hot rolled coils, sheets and plates, cold rolled coils and sheets, and metallic coated steel products.
The DGTR noted that India has seen a sudden and significant rise in steel imports, which posed a serious threat to domestic producers. The safeguard duty is intended to curb the inflow of low-priced steel and provide relief to Indian manufacturers.
Why this is important for Tata Steel
Tata Steel, with its strong presence in the domestic flat steel segment, is expected to benefit from reduced competition from cheaper imports and improved pricing power. The duty could help support margins, enhance capacity utilisation and bring greater stability to domestic steel prices over the medium term.
The government had earlier imposed a provisional safeguard duty in April 2025 for 200 days. The latest notification extends protection for three years, offering longer-term visibility to the sector.
Broader sector impact
The announcement has brought steel stocks back into focus as markets factor in the potential earnings impact of lower import pressure. The move also aligns with the government’s broader push to ensure fair trade practices and support the domestic steel industry.
With the safeguard duty now in place, Tata Steel shares are seeing renewed buying interest as investors assess the benefits of a more favourable operating environment for domestic steel producers.
