India's Steel Imports Surge Amid Rising Demand and Low-Cost Imports: A Deep Dive
India, the world’s second-largest producer of crude steel, has witnessed a significant shift in its steel trade balance. According to provisional government data, the country’s finished steel imports have reached an unprecedented level in the first ten months of the financial year, signaling a worrying trend for its domestic steel industry. As of January 2025, India imported 8.3 million metric tons of finished steel, a 20.3% increase compared to the same period in the previous fiscal year.
India’s Growing Dependence on Steel Imports
India’s steel industry has long been a pillar of its manufacturing sector, but recent trends indicate that the country is increasingly relying on steel imports to meet its domestic demand. For the 2023/24 financial year, India became a net importer of steel, marking a pivotal shift in its steel trade dynamics. This change comes after years of steady growth in steel imports, with China being a primary contributor to the influx of finished steel.
The data reveals that India’s steel imports have surged despite the country’s position as one of the top producers of crude steel globally. The 8.3 million metric tons of finished steel imported during April-January 2025 marks a record high, highlighting the growing gap between domestic production and consumption, especially as demand for steel continues to rise.
India Considers Safeguard Duty to Protect Domestic Industry
To address the growing concerns of steelmakers, the Indian government has initiated an investigation into the possibility of imposing a temporary import tax, known as a safeguard duty. This tax could range between 15% and 25% and is expected to be implemented within the next six months to a year. The aim of this safeguard duty would be to curb the influx of cheap imported steel, particularly from countries like China, and to provide relief to Indian steelmakers struggling with reduced margins.
The safeguard duty could significantly impact the price of imported steel, which would, in turn, help domestic producers regain their competitiveness. While the government has yet to finalize the decision, the investigation signals a strong indication that India is taking steps to protect its steel industry from the adverse effects of increasing steel imports.
Declining Exports and Rising Domestic Consumption
Despite the rising imports, India’s steel industry has also been facing challenges on the export front. Finished steel exports during the April-January period of 2025 reached just 4 million metric tons, a seven-year low, representing a 29% decline from the previous year. This drop in exports is a cause for concern, as India has traditionally been a key exporter of steel, and a reduction in exports could negatively impact its trade balance and global market share.
On a more positive note, India’s domestic steel consumption has remained strong, reaching a seven-year high of 124.8 million metric tons during the same period. The strong demand within the country, driven by infrastructure projects, construction, and manufacturing, has helped offset the challenges posed by rising imports and declining exports.
Crude Steel Production Growth
India’s crude steel production during April-January 2025 stood at 124.9 million metric tons, marking a 4.5% year-on-year increase. This growth in production is encouraging, particularly given the country’s increasing reliance on imports for finished steel. The rise in crude steel output reflects India’s ongoing efforts to meet the growing demand for steel domestically, but the increase in production has not been enough to stem the rise in finished steel imports.
