Steel Ministry in talks with FinMin to pursue policy measures to curb surging steel imports, protect domestic market

New Delhi: The Steel Ministry is in discussions with the Finance Ministry to explore options for curtailing rising imports of steel while taking steps to protect the domestic industry, a senior official told Businessline.

Policy interventions have been sought, and these could be in the form of duty impositions on specific offerings or other trade-limiting measures.

According to the official, Indian steel players and other stakeholders have already represented their concerns about rising imports of the metal to the Ministry. Presentations were also made to Ministry officials, including the Minister.

“We are taking it up with the Finance Ministry for probable policy interventions. These are ongoing discussions,” the official said.

On Thursday, the Steel Ministry launched an upgraded Steel Import Monitoring System (SIMS 2.0) to track, report, and monitor import shipments. The revamp aims to make reporting more rigorous.

For example, if an import consignment declares a particular source of import that is not licensed by BIS, the Ministry will be enabled to not recommend its import.

“The detailed data will enable Customs to conduct better analysis and risk management of steel imports,” Steel Minister HD Kumaraswamy said.

Net Importer Status

The increase in steel imports, particularly from China, has been highlighted as a concern even in the annual Economic Survey of 2023-24. India, incidentally, turned net importer – where imports exceeded exports – in FY24.

“This was largely driven by price differentials between international and domestic prices of finished steel. Low prices in the international market led to reduced profit margins for exports and made imports more affordable, affecting the trade balance in steel,” the Economic Survey mentioned.

In Q1FY25 (April – June), the country continued to be a net importer. Shipments of the metal coming in were at 1.9 million tonnes (mt), up 30 percent, whereas exports were 1.3 mt, down 38 percent.

Quick Response Time Measures

“We are taking up the matter with the government for various kinds of trade-limiting measures, which need to be put in place quickly. There are visible cases where trade measures, as per world trade regulations, can be taken, and those can be expedited. In addition to that, we are looking for and discussing other trade measures which could be possible,” Jayant Acharya, Joint MD & CEO of JSW Steel, said during a post-results earnings call.

Incidentally, India’s largest steel-maker, JSW Steel, has repeatedly spoken of rising imports from China as well as other FTA countries as a concern for the domestic steel industry. Countries have put barriers on surplus steel coming in.

Imports from other FTA countries are up 43 percent, indicating possible trade diversions into India. The JSW Steel JMD and CEO said, “...especially from China and the FTA countries is a concern for us because it’s gone up year-on-year.” Despite some monthly dips, imports continue to be at elevated levels.