Key points
- Indian producers already facing increased competition
- Asian steel export likely to be diverted to India
- India fears being dumping site for cheap steel
ISLAMABAD: Indian steel producers are worried about a new set of challenges for exporting products after US President Donald Trump announced plans to reintroduce a 25 per cent tariff on all steel and aluminium imports.
India’s smaller steelmakers could be forced out of business by a further surge in imports resulting from the sharp tariff increases.
Currently, Indian producers are already facing increased competition from rising cheap imports from some of the world’s leading producers.
“The increased tariffs may divert Chinese and other Asian exports to India while heightening competition, creating a downward pressure on domestic prices, and affecting small Indian producers with low-cost Chinese dumping,” Anubhav Kathuria, managing director of stainless steel producer Synergy Steels, told Reuters news agency last month.
Steel prices in India have already dropped in recent months, pressured by an influx of cheap imports, prompting smaller producers to consider job cuts.
The increased tariffs may divert Chinese and other Asian exports to India while heightening competition, creating a downward pressure on domestic prices, and affecting small Indian producers with low-cost Chinese dumping.” – Synergy Steels managing director Anubhav Kathuria
JSW Steel, India’s biggest steelmaker, reported a larger-than-expected decline in third-quarter profit at the beginning of this year, hit by lower prices, subdued demand, and rising imports.
Indian experts have suggested the government protect the country’s steel industry from other countries diverting steel to India because the South Asian country does not have any safeguards.
Government intervention
India, which became a net importer of steel in the 2023/2024 financial year, is investigating whether to impose a temporary tax to curb imports.
Separately, the Indian Steel Association has sought government intervention to secure an exemption from US tariffs.
According to a report by AP, many industry workers and experts expect that the result of tariffs will be that cheap steel gets dumped in places like India.
In February, Naveen Jindal, the president of the Indian Steel Association, which represents all of India’s steelmakers, said that he was “deeply concerned,” especially since “India is one of the few major markets without any trade restrictions,” making it a target for potential steel dumping. The increased competition could impact efforts by India to produce its own steel more cleanly.
Greenhouse gas emissions
The current production of most Indian steel releases high levels of greenhouse gas emissions, which cause climate change.
Reduction efforts could be cut in the interest of keeping profits up.
“Building more coal-based blast furnaces make it more difficult for India to export its steel in the future, particularly to Europe,” Easwaran Narassimhan of the New Delhi-based think tank Sustainable Futures Collaborative told AP.
The European Carbon Border Adjustment Mechanism, a tax on carbon emissions that Europe will begin charging for all products imported to the bloc from next year, would likely turn off any buyers from steel made with coal-based blast furnaces.
This will further push Indian steelmakers out of competition.
