At MetalMiner we are no strangers to the often contentious issue of excess Chinese steel imports coming to unwelcome foreign shores.
India has not been on that bandwagon as much as other nations as its economy and growth are inexorably linked to that of China, its gargantuan neighbor. Cheap imports of iron ore and steel, however, are starting to get the goat of Indian manufacturers. The stainless steel producers of India, in particular, are crying foul.
The Indian Stainless Steel Development Association (ISSDA), an industry representative body, said India’s stainless steel imports have increased to about 40% of the country’s consumption of around 2.5 million tons per year, but at the same time, the operating capacity of its stainless steel industry had declined to 50% due to cheap imports from China and other Free Trade Agreement (FTA) countries.
Imports from not only China (a major portion) but also Taiwan and South Korea have shot up in the last 7 months by 150%, the Association claims.
A report on The Business Standard said until last financial year, total imports from all foreign countries combined was 100,000 tons, but in the current fiscal, total imports from China, alone, had gone up to 250,000 tons.
Of the 40% of imported stainless steel coming into India, about 25% was shipped in from China, the ISSDA said. ISSDA is worried. After all, India’s steel industry has invested billions of dollars to augment capacity to try to achieve its goal of reaching the 3.5 million tons per annum (MTPA) soon.
So urgent is the stainless steel crisis, that the Government of India was actively considering slapping a 10% import duty on Chinese imports. The Indian Ministry of Steel is expected to soon suggest to the Finance Ministry a plan to impose a tax on stainless steel imports. That’s the highest tax that can be imposed on any country’s imports under the existing WTO rules.
The stainless steel industry, egged on by Prime Minister Narendra Modi’s “Make in India” campaign, is optimistic that the anti-dumping duty would come soon, more so because the stainless steel industry, despite having enough production capacity, “was bleeding” due to imports.
India, with crude stainless steel production at 3 million tons, is the third-largest producer and second-largest consumer of stainless steel. The per capita consumption of 2.1 kg is still low against the world average of 5 kg, thus presenting huge potential for growth.
India’s installed capacity is about 5 mtpa but it produces about 2.8 mtpa of stainless steel, almost half of which is used in the making of utensils.