Rising imports of low-cost steel, primarily from China and now Vietnam, has set off a debate within India’s engineering and manufacturing sectors. As the government considers imposing additional duties to curb the influx of cheaper steel imports , which are impacting domestic producers, the Engineering Export Promotion Council of India ( EEPC India ) as well as stainless steel producer Jindal Stainless (JSL) have voiced their concerns about the potential effects of these protectionist measures. EEPC India, the organisation advocating for engineering goods exporters, is against limiting steel imports from cost-effective markets. According to the council, curbing steel imports from China will severely impact the engineering goods sector, especially MSMEs , which depend on competitively priced steel to sustain operations. “It is imperative to keep domestic steel prices competitive. The price differential between Chinese steel and Indian-produced steel is significant. This price advantage enables downstream industries, especially MSMEs, to remain competitive in domestic and global markets,” says Arun Kumar Garodia, Chairman of EEPC India. Several small firms are into producing steel-based engineering goods. As MSMEs contribute around 30% to India's GDP, any move that impacts these small firms would hurt economic growth, say stakeholders. The latest data from the Joint Plant Committee (JPC) shows a marked increase in steel imports from several key markets. Imports of finished steel from China have risen by 31.7%, from Japan 130%, and from Vietnam and Korea 52% and 6%, respectively. 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Notably, this growth in steel imports comes amid a supply-demand gap in the domestic market. Although crude steel production in India rose by 4.44% and finished steel production by 5.30% in the first five months of FY 2024-25, steel consumption has outpaced production, growing by 13.78%. The EEPC emphasised that any protectionist steps could lead to higher steel prices, reducing the competitiveness of MSMEs and jeopardising their ability to maintain cost-effective operations. “We urge the government not to impose additional duties or safeguard measures to curb steel imports. As steel is one of the key inputs for most engineering companies, any increase in its price could lead to reduced competitiveness and higher operational expenses,” adds the EEPC Chairman. Another perspective Large players like Jindal Stainless (JSL) have urged the government to balance import policies to ensure a fair playing field. The country's largest stainless steel producer argues that this is essential for the sustainable growth of India’s stainless steel industry and the broader success of initiatives like “Make in India.” Jindal Stainless (JSL) Managing Director Abhyuday Jindal says the influx of low-priced, and often substandard, stainless steel imports is placing significant pressure on domestic producers, eroding their market share and challenging the government’s Aatmanirbhar Bharat (self-reliance) vision. “The dumping of substandard stainless steel disrupts the market and threatens MSMEs, which account for over 40% of the sector,” he says, highlighting that MSME capacity utilisation has dropped to approximately 60%, hurting their role in industrial growth of the country. “The influx of stainless steel imports into India has been a challenge for the Indian stainless steel industry for a while now, particularly with China being a significant contributor,” he adds. Highlighting that Vietnam has also recently emerged as a major source of imports, he adds that the situation is particularly concerning for MSMEs, which are integral to India’s manufacturing sector and export potential. India's position as a net exporter of steel has shifted dramatically. In FY 2024, India became a net importer of steel for the first time since FY 2017, with an overall trade deficit of 1.1 million tonnes. This change reflects broader trends in global trade dynamics where countries like China and Vietnam have ramped up their export capacities significantly. Nominations for ET MSME Awards are now open. The last day to apply is November 30, 2024. Click here to submit your entry for any one or more of the 22 categories and stand a chance to win a prestigious award.
