Article XIX of the GATT 1994 read with the Agreement on Safeguards (AOS) provides the ground rules for safeguard actions. According to the AOS, a member may apply safeguard measures to a product if the member has determined that it is being imported into its territory in such increased quantities, absolute or relative to domestic production, as to cause serious injury to the domestic industry that produces identical or similar, or directly competitive products. Article 9 of the AOS provides for a special and differential treatment for developing countries.

The national legislation to implement the provisions of the AOS has been enacted under Section 8B of the Act. The Customs Tariff (Identification and Assessment of Safeguard Duty) Rules 1997 (the Safeguard Rules) govern the procedural aspects. Further, Section 8C of the Act and the Customs Tariff (Transitional Products Specific Safeguard Duty) Rules 2002 have been specifically enacted for imposing safeguard duty on any article imported into India from China in such increased quantities and under such conditions as to cause market disruption to the domestic industry. Various trade agreements including the India–Korea Comprehensive Economic Partnership Agreement (Bilateral Safeguard Measures) Rules 2017 and the India–Japan Comprehensive Economic Partnership Agreement (Bilateral Safeguard Measures) Rules 2017 also allow safeguard measures in the form of quantitative restrictions to control surges in imports from Korea causing serious injury to domestic producers of like or directly competitive products in India.

Similarly to the provisions of the AOS, Indian law provides that if the central government, after conducting an enquiry, is satisfied that any article is imported into India in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic industry, then it may, by notification in the Official Gazette, impose a safeguard duty on that article. It may be noted that any safeguard duty imposed under the Safeguard Rules shall be on a non-discriminatory basis and applicable to all imports of such an article irrespective of its source. 

The safeguard duty ceases to have effect on the expiry of four years from the date of its imposition unless revoked earlier. The DA also conducts a review of the need for continuance of safeguard duty.47 In no case shall the safeguard duty continue to be imposed beyond a period of 10 years from the date on which it was first imposed. If the duty so recommended is for more than a year, the DA is to recommend progressive liberalisation adequate to facilitate positive adjustment.