Business Line reports that India's Steel Ministry has initiated discussions with the Ministry of Commerce to address the increasing influx of cheap Chinese steel imports, a senior official disclosed. The discussions are part of a broader strategy to curb these imports, with a potential investigation into steel shipments from Vietnam also under consideration. This move follows persistent calls from top domestic producers for higher tariffs as India becomes a net importer of steel. Preliminary investigations suggest that a significant portion of low-cost imports from China is being routed through Vietnamese traders into India.
The discussions between the Steel Ministry and the Commerce Ministry are driven by the need to take necessary steps to control the surge in imports. According to the official, the rise in imports has been closely monitored, and the Commerce Ministry has been alerted. The official emphasized that demand for steel in China remains depressed, with no significant production cuts in the region. This situation has led to excess stock being exported across Asia, the Middle East, and Latin American countries, sometimes at prices below the cost.
India has turned into a net steel importer in FY24, with finished steel imports reaching a five-year high in April and May, according to government data. The trade deficit in the first two months of the fiscal year stands at ₹4,284 crore, which is 47% of the ₹9,036 crore reported in the previous fiscal year. A report from the Steel Ministry revealed that the value of steel imports in April and May was ₹11,831 crore ($1,419 million), while exports were valued at ₹7,547 crore ($905 million). In volume terms, imports stood at 1.3 million metric tons, up 37% year-on-year, outpacing exports at 0.94 million metric tons, down 40% year-on-year.
China has emerged as the top steel exporter to India, replacing Japan, with Vietnam also among the top five suppliers. In the months of April and May, one out of every three steel imports came from China, accounting for 32% of the total imports, making it the largest supplier. Vietnam, displacing Taiwan, has become the fourth largest supplier.
Concerns have been raised about the volume of steel imports from Vietnam, with allegations that elevated levels of Chinese shipments to Vietnam are being routed into India. The industry has made representations to the government to probe these imports, and a second official confirmed that this is under consideration. Data from consultancy firm BigMint shows that India is among the top five countries where steel shipments from China have increased. Between January and May 2024, 1.10 million metric tons of steel were shipped to India, a 51% increase year-on-year. In the same period last year, shipments were around 0.73 million metric tons.
Other countries experiencing a surge in Chinese steel shipments include Vietnam, which saw an 89% year-on-year increase to 5.51 million metric tons, the highest among all nations. Brazil saw a 60% increase to 1.45 million metric tons, and the UAE experienced a 53% increase to 2.18 million metric tons during the January-May period of this year. Until FY23, Vietnam was one of the major buyers of steel from India, highlighting the shifting dynamics in the global steel trade.
