Donald Trump hints at tariffs on steel imports that could impact Indian exports

This comes at a time when Indian steel companies are grappling with several challenges in international markets, leading to a sharp decline in exports and a significant rise in steel imports into India. During the first half of the ongoing financial year, steel imports into India surged by approximately 41 per cent, while exports declined by 36 per cent, official data showed.

The Commerce and Industry Ministry and the Steel Ministry had met with industry stakeholders on Monday to discuss the looming problems in the steel industry. Taking note of the domestic steel industry’s concerns, the Steel Ministry proposed a 25 per cent safeguard duty on the import of certain steel items, PTI reported.

Last month, Steel Secretary Sandeep Poundrik at an industry event said that steel consumption in India is rising, adding that profitability of the steel manufacturers are declining.

“In the first half of 2024-25, we observed a 13 per cent growth in steel consumption. On the demand side, there is no apparent issue. If this growth continues, alongside the government’s push for infrastructure and public spending, we will require around 300 million tonnes of capacity by 2030,” Poundrik said.

“However, profitability remains a concern, especially in the past six months, as international dumping has led to depressed steel prices. Indian imports have risen by 41 per cent in the first half of the financial year, while exports have declined by 36 per cent. Inventory levels in steel companies have increased from the typical 15-16 days to as much as 30 days. It is a genuine problem, and we are fully aware of it,” Poundrik explained.

He also emphasised that there are multiple ways to protect the domestic steel industry, including increasing the basic customs duty.

“The challenge is that 62 per cent of our imports come from FTA countries. So, increasing the basic customs duty would have no impact on these imports, as they are duty-free. Another option is to impose a safeguard duty, which the industry would need to propose to the Directorate General of Trade Remedies (DGTR),” he added.

Rating agency India Ratings had earlier reported in October that the surge in steel imports has affected the profit margins of domestic players, with these pressures expected to intensify during the second half of the ongoing financial year.

“Ind-Ra believes the Indian steel industry is experiencing margin pressure due to higher volumes of lower-priced steel imports from countries such as China, Vietnam, Japan, and Korea. This pressure is expected to intensify in the second half of FY25,” the agency stated.