India’s finished steel imports from China, South Korea, and Japan surged, turning the country into a net importer. Rising demand, fueled by infrastructure projects and urban expansion, contrasts with slow domestic supply growth. Imports from major Asian exporters soared, while India’s steel exports dropped to a seven-year low. The government is exploring safeguard duties to manage increasing imports.
India’s finished steel imports from China, South Korea, and Japan reached a record high in the first ten months of the financial year, according to provisional government data reviewed by Reuters. As the world’s second-largest crude steel producer, India saw a surge in finished steel imports between April and January, making it a net importer during this period, as previously reported by Reuters.
Key drivers of rising steel demand
The growing demand for steel is primarily driven by an increasing shift toward metal-intensive construction in residential and infrastructure projects. Modern buildings and large-scale developments are reshaping the industry, reinforcing steel’s role as a key material for long-term economic expansion.
Government-led initiatives, such as the Pradhan Mantri Awas Yojana (Housing for All) and the Gati Shakti Master Plan, are expected to be major catalysts for this growth. These programs aim to accelerate urban development and infrastructure expansion, boosting steel consumption in roads, bridges, housing, and public facilities.
Beyond infrastructure, several industries are fueling steel demand. Sectors like engineering, packaging, and industrial manufacturing are relying more on steel for production, driven by the need for durable and high-performance materials.
Analysts also highlight rapid urbanization as a key factor. As cities expand and modernize, the demand for sustainable and long-lasting construction materials continues to rise. The shift toward eco-friendly and resilient structures has strengthened steel’s position as a preferred material for builders and developers, ensuring its continued significance in construction and manufacturing.
Challenges in domestic steel supply
Despite strong demand, India’s domestic steel supply faces persistent challenges. Analysts report that while Indian steel plants recorded a 5.2% year-on-year increase in supply in 2024, production was hampered by prolonged periods of planned and preventive maintenance.
The country’s seven largest steel producers saw almost no growth, with total steel production rising by just 0.05% year-on-year. Rolled steel output grew marginally by 0.5%, reflecting limited capacity expansion. In contrast, medium and small steel manufacturers outperformed larger players, registering a 4% rise in overall steel production and an impressive 11.3% increase in rolled product output.
Surge in imports from key Asian exporters
Imports from South Korea, India’s largest supplier of finished steel, totaled 2.4 million metric tons, an 11.7% increase from the previous year. Steel shipments from China stood at 2.3 million metric tons, reflecting a 3.4% year-on-year rise. Meanwhile, Japan’s finished steel exports to India surged to 1.8 million metric tons—an 88.6% jump from the previous year.
Collectively, imports from these three countries accounted for 78% of India’s total finished steel imports. Additionally, steel imports from Indonesia surged nearly threefold year-on-year, reaching 0.3 million metric tons. Among imported steel products, hot-rolled coils or strips dominated, while bars and rods led shipments in the non-flat steel category.
Government response and declining steel exports
In December, India launched an investigation to determine whether a safeguard duty or a temporary tax was necessary to curb the surge in steel imports. Last month, Steel Minister H.D. Kumaraswamy stated, “The government could impose a safeguard duty of 15% to 25% on steel imports.”
While imports continued to rise, India’s finished steel exports fell to their lowest level in at least seven years during April-January. Italy, the country’s top export destination for finished steel, saw shipments nearly halve during the period. Exports to Belgium, Nepal, and Spain also declined, according to government data.
