In the first seven months of the 2024/2025 fiscal year, India witnessed a dramatic surge in steel imports from China, reaching a historic high of 1.7 million metric tons. This marked an increase of 35.4% compared to the same period in 2023, according to preliminary government data. China dominated India’s steel imports, particularly supplying stainless steel, hot-rolled coils, galvanized sheets, and electrical steel. As a result, China, along with other major exporters like South Korea and Japan, accounted for a significant portion of India's steel imports, with these three countries alone representing 79% of the total imports.
The rise in steel imports reflects India's booming demand for steel, fueled by the country's rapid urbanization, infrastructure growth, and strong economic performance. Steel is a critical material for India’s infrastructure projects, including the construction of roads, bridges, housing, and other major developments. These sectors are experiencing unprecedented expansion, which has kept steel consumption in the country at elevated levels. In fact, total steel imports in India during the period from April to October 2024 reached a seven-year high of 5.7 million metric tons, highlighting the increasing reliance on foreign suppliers to meet domestic demand.
However, the influx of cheap steel from China has raised significant concerns within India's steel industry. Local steel producers are struggling to compete with the lower prices of Chinese products. The situation is further complicated by the fall in domestic steel prices, which has led to financial strain for Indian manufacturers. Many small and medium-sized steel producers, in particular, are finding it increasingly difficult to stay competitive in the face of these cheap imports. This has prompted calls for greater protection of the domestic steel industry to ensure the survival of local businesses and maintain a balanced, competitive market.
In response to the growing influx of low-priced steel, the Indian Ministry of Steel has proposed a safeguard duty of 25% on flat steel products. This safeguard duty is a temporary measure, which the Ministry suggests should remain in place for two years. The proposal was formally submitted to the Ministry of Commerce on November 27, 2024. The goal of this safeguard duty is to curb the flow of cheap Chinese steel and help stabilize the domestic market by giving local producers a fairer chance to compete. If implemented, this measure could provide much-needed relief to India’s steel industry, which is currently grappling with financial difficulties caused by unfair pricing practices.
Despite the surge in imports, India’s consumption of finished steel reached a seven-year high, underscoring the ongoing strength of domestic demand. Between April and October 2024, the country’s steel consumption rose sharply, reflecting the continued growth of the infrastructure and construction sectors. This increase in domestic consumption is a sign of a resilient economy that continues to push forward, even amid challenges from foreign competition. While steel production in India remains robust, the rising import figures indicate that local production is not yet sufficient to fully meet the growing demand, which is why India continues to rely on imports.
At the same time, India’s steel exports have taken a hit, with a notable decline of 29.3% year-on-year in the April-October 2024 period. Despite this drop, Italy emerged as the largest buyer of Indian steel, and exports to the UK showed a small increase of nearly 15% year-on-year. The decline in exports is concerning for the Indian steel industry, which had previously been a strong exporter of steel products. However, this drop in exports may be partly due to a reorientation of India’s steel output to meet internal demand, as well as global market fluctuations.
Looking at India’s steel trade over the entire fiscal year 2023/2024, the country became a net importer of rolled steel products. In that year, India imported 8.3 million metric tons of rolled products, marking a 38.1% year-on-year increase. Conversely, the country’s steel exports amounted to 7.5 million metric tons, which was an 11.5% increase over the previous year. This shift from being a net exporter to a net importer of steel reflects a broader trend of rising domestic consumption, but it also points to India’s increasing dependency on global steel markets to satisfy its needs.
The current steel trade dynamics in India underscore the growing challenges faced by both local producers and the government. While the country’s steel consumption continues to grow in line with its economic development, the surge in imports, especially from China, poses serious risks to the long-term sustainability of India’s steel industry. The proposed safeguard duties are one potential solution to protect domestic producers, but they also highlight the delicate balance between encouraging free trade and protecting national industries from unfair competition. The outcome of these proposed measures, along with the response from international trading partners, will shape the future of India's steel sector and its role in the global steel market.
