Tata Steel shares kicked off the new year of 2026 on a positive note, extending their winning streak for a fourth consecutive session. The stock gained another 1.2% during Thursday's intraday trade on January 1, touching a high of ₹182.20 per share. This sustained upward movement is largely attributed to a significant policy decision by the Indian government aimed at protecting the domestic steel industry.
Government Policy Fuels Market Sentiment
The rally in Tata Steel and the broader sector follows the government's move to impose a three-year safeguard duty on imports of certain steel products. According to a finance ministry order issued late on Tuesday, December 30, a duty of 12% has been levied for the first year. This measure is designed to curb cheap shipments, particularly from countries like China, which have contributed to a global oversupply and multi-year low prices.
The duty structure is staggered, set to decrease to 11.5% in the second year and 11% in the third year. Importantly, it will apply selectively to products imported at prices below specific thresholds. The duty covers key flat steel items, including:
- Hot-rolled coils and plates
- Cold-rolled coils
- Metallic-coated steel
- Color-coated steel
This extension comes after an initial 200-day safeguard period that started in April and expired on November 7.
Strong Rally and Robust Demand Outlook
The positive market reaction has been substantial. With today's uptick, the four-day cumulative gain for Tata Steel shares has reached 8%, pushing the stock to trade above a one-month high. This performance caps off a stellar 2025 for the company, during which its share price rallied an impressive 30.5%, significantly outperforming the Nifty 50's 10.5% gain.
Analysts point to a confluence of factors behind the strong investor sentiment, including the company's strategic expansion plans, a recovery in steel prices, and rising domestic consumption. India's steel demand has remained robust and is projected to accelerate further. In a September note, brokerage firm Axis Capital highlighted that domestic finished steel consumption grew at a strong 12.6% compound annual growth rate (CAGR) from FY22 to FY25, reaching 151 million tonnes.
The firm expects demand to remain healthy, forecasting a 7.2% CAGR from FY25 to FY31E, potentially reaching 230 million tonnes. This growth is expected to be driven by the government's continued infrastructure push and rising construction activity, with previously slower segments like aerospace and shipbuilding also beginning to contribute.
Tata Steel's Strategic Growth Blueprint
The company's own ambitious plans are reinforcing market confidence. In a board meeting held on December 10, 2025, Tata Steel outlined a comprehensive long-term growth strategy for its Indian operations. Key initiatives include:
A 4.8 million tonnes per annum (MTPA) expansion at Neelachal Ispat Nigam (NINL).
Signing a memorandum of understanding with Lloyd Metals to collaborate on iron ore mining infrastructure and steelmaking.
Setting up a 6 MTPA greenfield capacity in Maharashtra.
Acquiring a 50% equity stake in Thriveni Pellets for ₹636 crore to strengthen raw material integration.
These strategic moves, combined with protective government policies and a favorable demand environment, position Tata Steel for continued growth. The extension of import duties provides the domestic industry with a crucial shield against cheap imports, allowing companies to capitalize on the nation's infrastructure-led economic expansion.
