India’s steel industry is calling for government intervention to increase import tariffs from 7.5% to 12.5% to combat the surge of Chinese steel flooding the market.
The Indian steel industry is facing mounting pressure from a surge of Chinese steel imports, prompting calls for the government to raise import tariffs. Industry leaders, including major steel manufacturers like Tata Steel, have urged the government to consider increasing the import tariff on steel from the current rate of 7.5% to 12.5%.
The Ministry of Steel and the Ministry of Commerce are reportedly discussing the issue as data indicates a significant increase in steel imports from China. From April to May, India imported 1.1 million tonnes of finished steel, marking a 19.8% year-on-year increase.
Steel manufacturers in India have expressed deep concerns over the influx of Chinese steel. Ranjan Dhar, Director of Sales and Marketing at ArcelorMittal Nippon Steel India, highlighted the threat posed by Chinese steel imports to the Indian market, advocating for an increase in import tariffs to 12.5%.
The low domestic demand for steel in China has led Chinese exporters to reduce prices in a bid to increase sales in foreign markets, putting enormous pressure on the Indian steel industry. Data shows that in May 2024, India’s steel exports amounted to 500,000 tonnes, a nearly 25% decrease from April. The large volume of Chinese steel exports has caused global steel prices to remain under pressure, negatively impacting India’s steel exports.
A report from Crisil indicates that China exported approximately 94 million tonnes of steel products globally in 2023, a 38% increase from 2022. This figure is expected to surpass 100 million tonnes this year, with Chinese steel exports to India reaching $434 million in April alone.
The Indian government estimates that the country will import 8.3 million tonnes of finished steel in the fiscal year 2024 (April 1, 2024, to March 31, 2025), a 38% increase. Although domestic demand in India is currently sluggish, it is expected to recover as both government and private sector investment in infrastructure and other projects resumes.
As the Indian steel industry grapples with the challenges posed by Chinese imports, the government’s decision on tariff adjustments will be crucial in shaping the future of the domestic steel market.
Information for this report was gathered from the Ministry of Steel, the Ministry of Commerce, industry reports, and interviews with key stakeholders in the Indian steel industry.