India turns net importer of steel despite being world’s second largest producer

By: |
April 12, 2019 5:56 PM

In reaction to this, the domestic steel producing companies have also demanded for an imposition of higher duties on imports.

In a setback to the government, India has emerged as a net importer of steel during FY19, despite being the second largest producer, for the first time in three years. This is primarily on the back of demand for better quality steel in the domestic market and reduced exports which fell by more than a third due to imposition of safeguard duties by the two biggest buyers of alloy — the United States of America and Europe during the last year, reported Reuters.

India is the second largest steel producing nation with a total production of 106.4 million tonnes. The steel industry has performed well even amid slowdown in the industrial production during the last few months.

However, finished steel exports fell 34 percent from the previous year to 6.36 million tonnes between April 2018 and March 2019, according to Reuters. On the other hand, India became a net importer of finished steel with increase in its imports by 4.7 percent to 7.84 million tonnes.

Exports have also fallen because of the loss of middle-east and African market to other competitors who were also ousted from the US and Europe markets such as China, Japan, South Korea and Indonesia, according to Reuters. Similarly, imports from these nations also increased in the Indian domestic market.

In reaction to this, the domestic steel producing companies have also demanded for an imposition of higher duties on imports.

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“The imports for producing value-added steel for the auto sector is mainly by foreign steelmakers like POSCO,” sources told Reuters.

While, the Ministry of steel has urged local automakers to reduce imports from Japan and South Korea, the domestic manufacturers say that they are unable to good quality of steel locally.

Further, stainless steel manufacturers believe that there is a possibility that China is diverting its goods via Indonesia, in order to avoid additional custom duty in India.

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