Indian safeguard duty slashes Nepal’s iron and steel exports by two-thirds

Nepal's vital iron and steel export sector faces a severe downturn following India's implementation of safeguard duties. Exports to India, Nepal's primary market, have plummeted by nearly 69 percent in the first 11 months of the current fiscal year, translating to a loss of Rs10.59 billion in earnings. This sharp decline has ignited concerns about potential job losses and a significant reduction in government revenue.

Industry insiders warn that the situation could worsen as India considers further restrictions on steel imports, especially products made with Chinese raw materials. India, the world's second-largest crude steel producer, introduced a three-year safeguard duty ranging from 11 to 12 percent on selected steel products in December to combat cheap imports. This measure applies to imports from China, Vietnam, and Nepal.

Nepali manufacturers contend that the safeguard duty is unfair, given Nepal's status as a least developed country facing economic and environmental vulnerabilities. They assert that the tariff has severely hampered their production and export capabilities. While India's Directorate General of Trade Remedies recommended the duty to protect its domestic industry, Nepal's steel sector, which primarily exports zinc sheets, is now grappling with the consequences of this protectionist policy.