Surge in finished steel imports sparks industry woes, policy dilemmas

It remains to be seen how the government charts out a path to address the competing concerns and resolve the matter

India's finished steel imports reached 5.768 million tonnes (MT) during April-October 2024, registering a 42.1 per cent year on year (Y-o-Y) growth over the same period last year.

 

This has led to concerns among large domestic steel producers and Indian steel associations, who have asked the government to protect their businesses. They demand that additional duties be imposed on cheap steel imports.

 

Recently, the steel ministry proposed a 25 per cent safeguard duty on the import of certain steel items into the country.

 

However, the micro, small and medium enterprises (MSMEs) do not favor the proposed additional duties. They fear more duties would make their exports and domestic products uncompetitive, given that the local steel producers have hiked their steel prices. 

 

India's finished steel imports have grown at a compound annual growth rate (CAGR) of 5.29 per cent from FY20 to FY24 and the country turned into a net importer of finished steel in FY24.

 

The finished steel imports reached 8.3 MT in FY24, up from 4.7 million tonnes during Covid-19. The possibility is that by the end of FY25, steel imports might hit the 10 MT mark.

 

China, South Korea and Japan have been the top exporters, comprising 78.6 per cent of the total finished steel imports in FY25.

 

Until FY23, South Korea was the largest exporter to India, followed by China and Japan. Since FY24, China has taken the lead, exporting 2.6 MT of finished steel to India in FY24 and 1.7 MT in the first seven months of FY25. Vietnam's share has increased from 1.27 per cent in FY20 to 8.86 per cent in FY24. While Nepal’s share rose to 1.44 per cent in FY24 from 0.09 per cent in FY20, Germany’s halved, and Indonesia’s plummeted from 6.86 per cent in FY20 to 1.13 per cent in FY24.