India’s Steel Trade Deficit Soars to ₹26,468 Crore as Imports from China Surge

India’s steel trade deficit has reached a record high of ₹26,468 crore for the period from April to November 2024, according to a report by the Ministry of Steel. The sharp increase in imports, particularly from China, and a decline in exports have led to this widening deficit, marking the largest gap in the last five years.

During the period under review, India’s imports of finished steel surged by 26.6%, reaching 6.5 million tonnes (mt), while exports fell by 23.6%, amounting to just 3.5 mt. As a result, India became a net importer of 3.154 mt of finished steel, with imports nearly doubling in value to ₹52,862 crore, compared to ₹26,394 crore for exports. The surge in imports has been predominantly driven by China, which now accounts for nearly one-third of India’s steel imports. Shipments from China rose by nearly 23% year-on-year during the April-November period, totalling almost 2.0 mt. This growth has been especially noticeable in categories like stainless steel, alloyed steel, and various types of finished steel such as plates, electrical sheets, and coated galvanized coils.

China’s dominance in the Indian market has led to it overtaking Japan in some key categories. Imports from Japan also saw a dramatic rise, up over 100% year-on-year to 1.4 mt, compared to 0.7 mt in the previous fiscal year. Additionally, countries like Korea, Indonesia, and Vietnam have emerged as other significant steel exporters to India. Vietnam’s imports of steel into India have remained steady despite a probe by India’s Directorate General of Trade Remedies (DGTR) into the practice of rerouting Chinese steel via Free Trade Agreement (FTA) countries. There are concerns within the Indian steel industry that China may be using these FTAs to bypass tariffs and dump cheap steel into India, further undermining the domestic industry.

Exports to key European markets like Italy and Spain have also taken a hit, with shipments falling by 22% and 32% respectively. The value of exports to these regions has also declined, reflecting ongoing challenges in European markets, which are grappling with weak demand from sectors such as construction and automotive. In contrast, European steel producer ArcelorMittal has raised prices for Hot Rolled Coil (HRC) products for deliveries in early 2025, citing an uptick in demand from the automotive sector, which could potentially stabilize export prices to Europe. However, Indian HRC offers to Europe have remained relatively stable, hovering around $590-595 per tonne.

The Middle East, once a major export destination for Indian steel, has also shown a decline in activity, with Indian steelmakers losing ground to China, which offers more competitive pricing. As demand in the region slows, trading activity has considerably decreased, further impacting India’s steel exports. India’s steel sector, which has long relied on both domestic consumption and exports, now faces increasing pressure as it struggles to compete with low-priced imports and address the challenges of a shrinking export market.