The Indian government is preparing to tighten quality control measures on steel imports following a rise in low-quality steel dumping, particularly from China, according to officials familiar with the matter. This development follows a recent review by the steel ministry, which highlighted increasing risks from global trade diversions impacting the domestic steel sector.

India became a net importer of steel during the first five months of the current fiscal year, importing 3.45 million tonnes (mt) compared to exports of 1.92 mt. With sluggish demand and high import duties in markets like the US and the EU, international producers have increasingly targeted India as a dumping ground for cheap steel.

Currently, steel imports are allowed through a no-objection certificate (NOC) from the steel ministry, even for multiple grades subject to quality control orders (QCOs). However, the ministry now plans to limit NOCs to only those grades that are unavailable locally. Officials confirmed that of the 1,279 steel grades covered under 151 QCOs, 1,127 were permitted through NOCs. “This loophole will soon be addressed by expanding the scope of QCOs,” said an official.

India imports approximately 400,000 tonnes of non-Bureau of Indian Standards (BIS) compliant steel annually, valued at around Rs 42 billion. To combat this, the government mandated in October 2023 that imports lacking BIS certification must first secure approval from the steel ministry.

In response to rising imports from China and Southeast Asia, the steel ministry has engaged stakeholders for further consultations. Globally, several countries—including the US, Canada, and the European Union—have implemented 25% safeguard duties on steel to protect their industries, while nations like Turkiye, Indonesia, and Japan have taken similar protective actions.

Additionally, India launched an anti-dumping investigation into cold-rolled non-oriented electrical steel imports from China in late September, following complaints by South Korean and Taiwanese manufacturers with operations in India.

The Chairman of Steel Authority of India Limited (SAIL) has called for the imposition of tariffs on steel imports, citing the need to protect the domestic steel industry from rising competition and price pressures. This recommendation comes amid growing concerns over the impact of cheaper imported steel, particularly from China, which is affecting the profitability and stability of Indian steel producers. The chairman highlighted that the influx of foreign steel has created market imbalances, making it difficult for local manufacturers to compete on both price and volume.

India’s steel industry, one of the largest in the world, has been facing challenges from an oversupply of cheaper steel imports, which has put downward pressure on prices. By imposing tariffs, the Indian government could level the playing field for domestic producers, allowing them to compete more effectively and maintain their market share. The SAIL chairman emphasized that protective measures would support the industry’s long-term growth and help safeguard jobs in the steel sector.

Steel tariffs are seen as essential for ensuring that the Indian steel industry can withstand the growing competition from global players, particularly from countries with lower production costs. The chairman’s call aligns with similar demands from other industry stakeholders who have expressed concerns about the current pricing environment and the potential impact on domestic production.

The proposal for tariffs is aimed at fostering a more sustainable domestic steel market, providing Indian producers with the protection they need to continue investing in capacity and technology. With steel being a critical component of India’s infrastructure and construction sectors, the industry’s stability is vital for the country’s overall economic growth.

The chairman of Steel Authority of India Limited (SAIL) has emphasized the need for India to impose tariffs on steel imports to protect domestic producers from rising competition. This recommendation comes amidst concerns about the adverse effects of cheap steel imports on local manufacturers, which have been struggling to compete with lower-priced foreign products. Implementing tariffs could help stabilize the domestic steel industry, promoting growth and ensuring that local manufacturers can thrive amid global competition.

The chairman argues that by levying tariffs, the government would not only safeguard the interests of domestic steel producers but also encourage investments in the sector, leading to increased production capacity and job creation. He believes that a robust domestic steel industry is crucial for India’s overall economic growth, especially as the country aims to enhance its infrastructure and manufacturing capabilities.

Additionally, the proposed tariffs could help balance the trade deficit by reducing reliance on imported steel, fostering self-sufficiency in the long run. Industry stakeholders are keenly watching the government’s stance on this issue, as it has significant implications for the future of the steel sector in India. By addressing import competition, India can work towards a sustainable and competitive steel industry, ensuring that local businesses can contribute effectively to the nation’s economic landscape.

As discussions continue, the focus remains on finding solutions that support both growth and sustainability within the steel industry, enabling it to meet domestic demands while fostering a resilient economy.