India Plans Action to Curb Chinese Steel Imports

New Delhi: With a significant rise of steel imports from China, India is mulling a multi-pronged approach to cut imports and augment the steel capacity across the sector to improve exports as well. The move of the government comes after the "unprecedented" surge in imports that ultimately hurt small Indian steel producers, who face cheap Chinese imports and falling domestic prices despite strong demand.

According to the latest provisional government data, India’s reportedly finished steel imports from China hit a record high in the first seven months of the current financial year, raising concerns among small Indian steel producers in the country. “India imported 1.7 million metric tons of finished steel from China during April-October, a 35.4 per cent increase compared to last year,” the data showed.

However, a top source from the steel ministry expressed concern over the rise of imports from China and other countries, saying that it is all driven by global producers, who are exploring new markets due to weak demand and high tariffs imposed especially by the US and the EU. “China could be one of the examples in which they dump maximum select steel products into India, resulting in the rise of imports. As far as the steel products are concerned, China mainly exported stainless steel, hot-rolled coils, galvanized sheets, plates, and electrical sheets to India. We are well aware of that and taking some proactive steps to reduce it,” the source said.

As per the data, overall the finished steel imports to India reached a seven-year high of 5.7 million metric tons during this period. “However, the finished steel imports from Japan and Vietnam doubled, with China, South Korea, and Japan making up 79 per cent of total imports,” the data said.

As far as exports are concerned, recent data showed that India’s finished steel exports fell by 29.3 per cent, with Italy becoming the largest buyer. Exports to Britain increased by nearly 15 per cent between April and October. As part of the review process, the ministry of steel has engaged with industry stakeholders, particularly in light of growing concerns over increasing steel imports from China and Southeast Asian countries. “In a bid to increase steel production, the government is considering several pro-steel industry schemes, including alternative financing to small and medium steel firms and promoting production-linked incentive or PLI scheme to benefit maximum to these traders in the country,” the source said.

Recently, the government is reportedly tightening quality checks as a way to curb the flood of steel imports. Currently, various grades of steel are permitted for import, subject to a no-objection certificate (NOC) from the steel ministry, despite existing quality control orders (QCOs).

As per the ministry source, India imports approximately 400,000 tonnes of non-BIS-compliant steel annually, valued at around Rs 4,200 crore. In a bid to curb the entry of substandard steel, the government had already mandated in October last year that any steel import not approved by BIS must first receive clearance from the steel ministry.