Imported Strength: India Leans on Foreign Steel to Meet Demand

India, the second-largest producer of crude steel globally, has become a net importer of finished steel during the financial year 2024-25. Official data show that imports have witnessed a steep rise due to lower overseas prices and strong domestic demand, while exports have recorded a sharp decline. This is an extension of the trend seen in the last fiscal year, and it has come as a concern for local steelmakers.

Key Points
Rise in Imports: India's finished steel imports increased by 15.8% year-on-year to 8.98 million metric tonnes during the period April-February 2024-25, with significant contributions from South Korea, China, and Japan.

Fall in Exports: Steel exports declined significantly by 33.7% year-on-year to 4.4 million metric tonnes during the said period, with European shipments especially hit by strengthened EU import curbs.

Net Importer Status: India posted a trade deficit of about 1 million metric tonnes of finished steel for FY 2024-25, which followed the trend from FY 2023-24.

Principal Sources of Imports:

South Korea: 2.6 million metric tonnes (+7.1% YoY).

China: 2.4 million metric tonnes (-5.3% YoY).

Japan: 1.9 million metric tonnes (+70% YoY).

Composition of Products: Flat steel products comprised 95% of the total imports, with hot-rolled coils/strips as the top-imported category.

Domestic Consumption and Production:

Consumption of finished steel grew by 11.3% to 137.8 million metric tonnes.

Production of crude steel grew by 5.2% to 138.2 million metric tonnes.

Government Actions: India suggested a provisional safeguard duty of 12% on some steel products for 200 days in order to cut down imports and safeguard local producers.

Implications
The increasing imports underscore challenges for Indian steel producers, such as competitive pricing pressures from overseas suppliers and lower export prospects because of world economic conditions. Domestic demand continues to be robust, but the government is looking at options like import duties and infrastructure investment to stabilize the industry.

Sources: SteelOrbis, Economic Times, Seair Exim Solutions, Ministry of Steel Monthly Summary, Reuters