Dec 31 (Reuters) - Shares of major Indian steel companies climbed between 2% and 5% on Wednesday after the country imposed a three-year import tariff on select products to curb cheap shipments from China.
The levy, locally known as a safeguard duty, will be imposed at 12% in the first year followed by 11.5% in the second year and then 11% in the third year.
Tata Steel and JSW Steel rose 2.4% and 5%, respectively, leading gainers on the benchmark Nifty 50 index. Steel Authority of India and Jindal Steel also added 2.5% and 3.5%.
"Post announcement of the safeguard duty, the domestic steel prices are currently at about 13% to 15% discount to the landed cost of imports from China, providing sufficient headroom for price hikes by domestic manufacturers," said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities.
The move follows the Directorate General of Trade Remedies' findings of a sharp surge in imports causing injury to domestic producers.
Earlier, the government had implemented a temporary 12% duty for 200 days in April. While that shorter duration caused investor uncertainty, the new three-year window provides long-term protection for local players, according to the analyst.