The Indian Steel Mills have sought a level-playing field from the government as imports from China find a sweet spot in the Indian market.
Key highlights
- Steel Imports from China grew 63% in April-July.
- India became a net importer of Steel in July.
- Production of Steel in China resilient amidst weak demand.
The Indian Steel Association (ISA) has sought government intervention to rectify anomalies in the rules that provide a conducive ground for Chinese imports to gain momentum in India.
Speaking on the issue, the Secretary-General of the ISA, Shri Alok Sahay mentioned that the association would request the government to tweak the rules since India is currently an easy target for Chinese steel exports.
Such a situation arose because China’s domestic steel demand slumped while the production remained resilient, leading to the highest steel exports the country has seen since 2016. This led to easy targeting of India as a market, since the western nations have trade barriers in place to shield the domestic steel and aluminium industry.
Any policy intervention would also have its time-lag in showing its effects (approximately 15 months in case of the steel sector), which was exploited by China to seep into the Indian market, putting domestic steel producers at disadvantage.
According to the Indian Steel Association’s data, steel imports from China saw an increase of approximately 63% in April-July even as the imports from South Korea declined.
Worries for Indian Steel Mills
The Chinese exports finding ground in India’s domestic market is a cause of worry for Indian Steel Mills.
The producers of Indian Steel find themselves fighting a multi-pronged battle: On one hand, the CBAM rules in Europe may hit the Indian Steel sector the most, and on the other, Steel has always been a protracted issue with the US.
While there were reports of the US ending retaliatory tariffs of Indian Steel, sources privy to the discussions have ruled out the seriousness of the proposal.
Add to that, the global trade demand is projected to be weak (including China) while the Chinese Steel has seeped through the frontiers despite having no Free-Trade Agreement (FTA) with India.
