India’s steel industry is poised for a strong start to FY26, with analysts at JM Financial predicting a significant margin expansion of approximately ₹2,000 per tonne in Q1. This optimistic outlook is primarily attributed to the government’s imposition of a 12 per cent safeguard duty on flat steel imports, which has provided a much-needed boost to domestic producers by curbing cheaper foreign inflows and stabilising prices.
In addition to the existing duty, the government is reportedly exploring the possibility of increasing the safeguard duty to 24 per cent, a move that could further reinforce the profitability of local manufacturers. According to industry experts, such measures will not only help balance demand-supply dynamics but also promote the competitiveness of Indian steelmakers in the global market.
This policy development comes at a crucial time when the domestic steel industry is recovering from volatile global pricing trends and cost pressures. The anticipated increase in margins is also being supported by stronger domestic steel prices and consistent demand from key sectors such as infrastructure, construction, and automotive. Market participants view this as a strategic intervention that aligns with the government’s broader push for self-reliance in core sectors and protection of domestic industry against unfair trade practices.
Moreover, industry sources highlight that the safeguard duties are part of a wider trade policy shift aimed at ensuring sustainable growth for domestic producers. If the proposed increase to 24 per cent materialises, Indian steel companies could see even stronger balance sheets in the upcoming quarters, paving the way for capacity expansion and technological upgrades.
With such a favourable regulatory and market environment, Q1 FY26 could mark a turning point for India’s steel sector.
