In response to a surge in steel imports from China, India is planning a comprehensive approach to reduce its dependency on foreign steel, particularly from China. The move comes as a growing number of small Indian steel producers face pressure from cheap imports, which have led to falling prices despite consistent domestic demand.
Recent data from the Indian government reveals a concerning trend finished steel imports from China have reached a record high in the first seven months of the current financial year. In fact, imports surged by 35.4% year-on-year, with 1.7 million metric tons of finished steel being imported from China between April and October. This sharp increase has led to alarm among smaller Indian steel producers, who struggle to compete with the low-priced Chinese products flooding the market. One source from the Ministry of Steel pointed out that the influx of Chinese steel, along with imports from other countries, is largely a result of global steel producers shifting focus to new markets due to weak demand and high tariffs in traditional destinations like the US and EU. “China has been increasingly exporting products such as stainless steel, hot-rolled coils, galvanized sheets, plates, and electrical sheets to India, leading to a significant rise in imports,” the source explained. The Ministry is actively pursuing strategies to mitigate these imports.
The problem isn’t limited to China alone. Finished steel imports from other countries, including Japan and Vietnam, have also spiked, contributing to an overall record-high import figure of 5.7 million metric tons of finished steel during this period. The dominance of China, South Korea, and Japan, which together account for 79% of total imports, has raised concerns within the government. On the export side, India’s finished steel exports have witnessed a sharp decline of 29.3%, with Italy becoming the largest buyer. However, exports to the UK showed a positive trend, increasing by nearly 15% in the same period. To counter the growing influx of foreign steel, the Indian government is considering a series of initiatives aimed at boosting domestic production. These include introducing financing schemes for small and medium steel producers and expanding the Production-Linked Incentive (PLI) scheme to help Indian producers gain a competitive edge. The government is also focusing on tightening quality checks for imported steel.
India’s steel ministry has already moved to curb the entry of substandard steel, which accounts for about 400,000 tonnes of non-BIS-compliant steel imports annually, valued at Rs 4,200 crore. Last year, the government introduced regulations requiring all steel imports to receive clearance from the ministry if they are not approved by the Bureau of Indian Standards (BIS). As part of the efforts to protect domestic manufacturers, India’s steel ministry has engaged industry stakeholders to ensure that the sector receives adequate support. This includes initiatives aimed at boosting the capacity of domestic steelmakers, thereby reducing reliance on imports and encouraging exports. The Indian government’s plan to restrict steel imports is expected to have a dual impact it will help safeguard local producers from the onslaught of cheaper foreign steel, while simultaneously fostering a more competitive and self-reliant steel industry. With these measures, India aims to not only curb imports but also strengthen its position as a major global exporter of steel.
