India’s Steel Imports from China Surge 35%, Pressuring Domestic Producers

India’s finished steel imports from China soared to a record 1.7 million metric tons in the first seven months of FY2024 (April-October), marking a 35.4% year-on-year increase, according to provisional government data. This surge, alongside cheap imports from other countries, has intensified financial pressures on India’s small and mid-sized steel producers, despite robust domestic demand fueled by rapid economic growth and infrastructure investments.

China, the world’s largest steel producer, primarily shipped stainless steel, hot-rolled coils, galvanized sheets, plates, and electrical sheets during this period. Overall, India’s finished steel imports rose to a seven-year high of 5.7 million metric tons during April-October, with China, South Korea, and Japan accounting for 79% of the total imports. Notably, imports from Japan and Vietnam more than doubled during this period.

The influx of cheaper Chinese steel has prompted India’s steel ministry to request a 25% safeguard duty or temporary tax on flat steel products for two years. In a letter dated November 27, Sandeep Poundrik, the top civil servant in the ministry, highlighted the “looming threat” of escalating imports from China.

Despite the challenges, India’s domestic steel consumption reached a seven-year high during April-October, reflecting robust infrastructure growth. However, exports of finished steel fell by 29.3% during the same period, with Italy emerging as the largest buyer of Indian steel. Interestingly, exports to Britain recorded a 15% rise year-on-year.

Hot-rolled coils dominated imports in the flat product category, while bars and rods led among non-flat products. India, the world’s second-largest crude steel producer, became a net steel importer in FY2023, and the trend has persisted into FY2024.

The Indian government’s potential safeguard measures aim to protect the domestic steel industry from further strain, but their implementation and effectiveness remain uncertain amidst increasing global competition.