India is actively engaging in discussions to address the growing concerns surrounding the rise in steel imports, according to Steel Minister H.D. Kumaraswamy, who spoke on Wednesday. Although he did not provide specific details, the issue has become a central focus for policymakers, as it significantly impacts the domestic steel industry.
Speaking at an industry event, Kumaraswamy acknowledged that the increasing volume of imports has emerged as a pressing problem for steel manufacturers, even though the demand for steel continues to experience rapid growth. India, currently the second-largest producer of crude steel in the world, found itself in the position of a net steel importer for the fiscal year that ended in March 2024.
This trend has continued into the current fiscal year, with the country remaining a net importer of steel from April through July 2024. The largest portion of these imports came from China, which maintained its position as the top steel exporter to India during this period. Japan and South Korea also contributed significantly to the influx of steel into the Indian market.
One of the major concerns arising from this surge in steel imports is the pressure it has placed on domestic steel prices. As a result of the increased competition from cheaper foreign steel, local steel prices have plummeted to levels not seen in over three years, according to data from BigMint, a commodities consultancy firm.
This situation has caused growing apprehension among local steel producers, who are struggling to maintain profitability amid falling prices and heightened competition from foreign imports. In response to these challenges, Kumaraswamy had previously mentioned his ministry’s intent to collaborate with the finance ministry to explore possible solutions, including advocating for an increase in tariffs on steel imports.
The objective of this move would be to provide much-needed protection to domestic steel mills, which are being adversely affected by a rise in lower-cost steel imports from countries such as China. While these discussions are ongoing, the steel industry is looking toward the government for more concrete measures that can help counterbalance the impact of the rising imports.
In addition to the tariff discussions, India has also taken other actions to address the situation. For example, in August 2024, the country launched an anti-dumping investigation into certain steel products imported from Vietnam. This move came after several major domestic steel producers, including JSW Steel and ArcelorMittal Nippon Steel, called for action to curb the influx of cheaper steel into the Indian market.
Anti-dumping investigations aim to determine whether foreign producers are selling goods at prices below fair market value, and if so, to impose duties that protect domestic industries from such practices. The ongoing discussions and investigations signal India’s commitment to addressing the challenges posed by rising steel imports, which are affecting both local prices and the overall health of the domestic steel industry. Policymakers and industry leaders alike are eager to find a balanced solution that supports the growth of the Indian steel sector while managing the pressures from international markets.
