Krupa Market -🚨 Price Pressure Ahead: India's Anti Dumping Duty on Steel Imports What MSMEs Must Know
As the year winds down, a key change in India’s trade policy is resetting the balance for thousands of Micro, Small, and Medium Enterprises (MSMEs) in the steel-consuming sector: the tightening grip of Anti-Dumping Duties (ADD) on steel imports.
The government’s intent is clear: to protect domestic steel producers from unfairly priced foreign steel that undercuts local markets. For MSMEs, however, this translates directly into a higher input cost and a narrowing of sourcing options.
Here is a breakdown of the recent moves and a critical action checklist for every steel-dependent MSME as of December 2025.
The Latest Duty Update: Vietnam in the Spotlight
In November 2025, India made a significant move by imposing a five-year anti-dumping duty on certain Hot Rolled (HR) Flat Steel products imported from Vietnam.
The Directorate General of Trade Remedies (DGTR) has specified a duty of $121.55 per tonne. This action targets the rising volume of imports, which were allegedly being “dumped” in the Indian market at prices below their normal production value. While this measure is a win for large domestic steel mills, it is a direct challenge to MSMEs that rely on cost-effective imported steel as a raw material for components, construction, and engineering goods.
The MSME Impact: Why Cost Structures Are Changing
The imposition of an Anti-Dumping Duty doesn’t just raise the price; it fundamentally alters the financial calculations for procurement.
1. Landed Cost Surge
The ADD immediately increases the “landed cost” of imported steel. This is the total cost of the material delivered to your factory gate. The new duty is a direct, unavoidable addition to this cost:
Base Price + Ocean Freight + Basic Customs Duty + Anti-Dumping Duty ($121.55/tonne) + IGST = New Landed Cost
For MSMEs operating on thin margins, this cost jump can be significant enough to erase profitability on older, fixed-price contracts.
2. Erosion of Sourcing Flexibility
Before the duty, imported steel often served as a crucial ‘safety valve,’ offering a lower-cost or faster alternative when domestic mill prices were high or lead times were long. The duty removes this price advantage, compelling MSMEs to shift procurement back toward domestic suppliers. While this supports the ‘Make in India’ goal, it can reduce your bargaining power and your ability to source highly specialized or niche grades that might be more readily available from global suppliers.
Critical Action Checklist for MSME Buyers
In this evolving environment, proactive adaptation is key. MSMEs need to be strategic in their procurement and costing to survive the pressure.
To successfully navigate the challenges posed by new anti-dumping duties on steel imports, MSMEs must prioritize proactive adaptation across four key areas: Costing & Finance, Contract Management, Sourcing & Logistics, and Domestic Relations.
Costing & Finance
MSMEs must immediately conduct a thorough review of their financial models. The most immediate and critical step is to update your Landed Cost Sheet. The new Anti-Dumping Duty (ADD) of $$121.55$ per tonne must be integrated into all cost models for affected steel grades, particularly those from Vietnam. This ensures that the true cost of imported material is accurately reflected, preventing unintended profit erosion. For a long-term strategy, MSMEs should implement systems to regularly track global steel price benchmarks and constantly monitor notifications from the Directorate General of Trade Remedies (DGTR) and Customs to anticipate and budget for future duty risks.
Contract Management
Inertia in contract management is a major risk when duties change. MSMEs must urgently review all major sales and purchase agreements. The primary goal is to identify existing contracts that lack a clear, mandatory “Variation Clause” which allows for automatic price adjustments based on changes in import duties and taxes. Going forward, the long-term strategy must be to negotiate all new contracts with clear language that explicitly permits the pass-through of any future duty increases (including ADD, Safeguard Duty, or Countervailing Duty) to the end customer, thereby protecting operating margins.
Sourcing & Logistics
Reliance on a single source or origin is now highly vulnerable to trade policy changes. MSMEs should adopt a strategy of Split-Sourcing critical materials. This involves actively mapping their material needs and diversifying their supplier base, ensuring they are not 100% reliant on either domestic mills or a single foreign origin. In terms of logistics, MSMEs importing small consignments (up to 500 MT annually in FY 2025-26) should utilize the simplified SARAL SIMS (Steel Import Monitoring System) route, which is designed to minimize procedural delays for small players. This ensures smoother compliance while managing diverse sources.
Domestic Relations
While duties are aimed at protection, MSMEs must leverage assurances from the government and domestic suppliers. It is crucial to hold domestic suppliers accountable to their commitment to supplying MSMEs with steel at Export Parity Prices. This commitment is designed to offset the impact of high import duties and ensure fair pricing. Additionally, MSMEs should stay informed about non-tariff barriers like Quality Control Orders (QCOs), as the government may ease or enforce certain standards, which can also affect the viability of both domestic and imported material supply chains.
🎯 Conclusion: Adapt or Absorb
The anti-dumping measures, combined with other trade remedies, form a protective shield for the Indian steel industry. For MSMEs—the backbone of India’s manufacturing sector—this shield is a double-edged sword. It encourages a robust domestic supply chain but introduces significant raw material price volatility.
In the months ahead, success will hinge on the ability of MSMEs to adapt quickly: shifting procurement strategies, cleaning up contract clauses, and implementing robust, real-time cost management systems. Ignoring these duties is no longer an option; the cost will be absorbed directly from your profit.