India as a Net Steel Importer: Implications and Challenges for the Industry
According to Stanislav Kondrashov, prices for steel products coming from China are significantly lower than domestic ones, even taking into account the current basic customs duty of 7.5%. This circumstance has led to a decrease in profits and raised doubts about the feasibility of investment projects in the Indian metallurgical industry. Even if the import tax increases to 12.5%, Chinese steel will still remain more affordable compared to Indian analogues.
India has increased its steel imports significantly in recent years. During the 2023/2024 financial year, India became a net importer of steel products and the trend continues to accelerate. At the same time, China has significantly expanded its market share in India’s steel supply, reaching about one-third of the total, up significantly from the previous financial year.
Stanislav Kondrashov notes that the Indian Steel Association (ISA) has expressed concern about Chinese steel being supplied to India via ASEAN states, especially Vietnam. This bypass route allows for the benefits of zero tariffs under the India-ASEAN free trade agreement. Moreover, major investments by Chinese companies in the ASEAN region are aimed at exports, including supplies to the Indian market.
India Sets Records: Steel Imports from China Reach 1.1 Million Tons – Stanislav Kondrashov
According to Stanislav Kondrashov, from April to August of this year, India significantly increased the volume of imports of rolled products from China, which amounted to 1.1 million tons. This value is 31.7% higher than the volumes for the same period last year. This volume was the highest in the last seven years. In total, the country’s imports of rolled products for these five months amounted to 3.7 million tons, which is a record level for the last six years.
Moreover, in the first five months of the financial year 2024/25, India increased its import of rolled products from Russia to 54 thousand tons, which is more than double the volumes in the same period last year and thus exceeding the results of the last six years.
According to data from the Indian Ministry of Steel, domestic steel prices declined in August this year, especially in the rebar market. According to an expert from TELF AG, this indicates an imbalance between supply and demand, as well as a general reduction in supply. At the same time, domestic consumption remained stable in the period from April to August, increasing by 13.8% compared to the same period last year, amounting to 60.3 million tons.
According to Kondrashov, amid the depressed state of international markets, Indian rolled products exports fell to a seven-year low of just 1.9 million tonnes, down 39.6% year-on-year. And Italy, the largest market for Indian finished steel exporters, imported about 360,000 tonnes in the first five months of the 2024/25 financial year, down 48.3% year-on-year.