【Breaking!】Following the U.S., India May Impose Tariffs on Chinese Steel

【Breaking!】Following the U.S., India May Impose Tariffs on Chinese Steel
According to Reuters, Indian Minister of Heavy Industries and Steel, H.D. Kumaraswamy, announced on February 12 that India may impose a temporary tariff of 15%-25% on Chinese steel within six months to counter the "serious challenges" posed by cheap imports. Kumaraswamy emphasized that Chinese steel imports often involve unfair trade practices, threatening domestic manufacturers, and reaffirmed the Indian government's commitment to protecting its steel industry.
Graphite electrodes specifically used in the electric arc furnace steelmaking process, especially in short-process steelmaking, where scrap steel is melted by high-temperature electric arcs.
Since December 2023, India has been investigating the feasibility of safeguard duties to curb steel imports and support local producers. If implemented, the tariff could last for two years, with the final rate likely set between 15%-25%.
Why is India Taking Action?
· In the 2024 fiscal year (ending March 2024), India became a net importer of finished steel, with imports from China reaching record highs from April to December 2023.
· Despite strong domestic demand fueled by infrastructure expansion, local steel prices have plummeted due to surging imports.
· Small Indian steel mills have been forced to cut production and consider layoffs due to rising import pressures.
Global Trade Shifts Impacting India
· U.S. Tariff Policies: With former U.S. President Donald Trump advocating for higher steel import tariffs, exporters are shifting their focus to India as an alternative market.
· Japan & South Korea: Both nations have free trade agreements (FTAs) with India, allowing duty-free steel exports. Analysts expect these countries to increase shipments to India in FY2026 as they look for new buyers amid U.S. trade barriers.
Challenges for Indian Steelmakers
· India's leading steel manufacturers, JSW Steel, Tata Steel, and Jindal Steel & Power, are struggling due to weak global demand and lower steel exports.
· JSW Steel reported a larger-than-expected profit decline in Q3 (Oct-Dec 2023).
· Despite short-term difficulties, the Indian government is seeking new export markets in Africa, the Middle East, and Southeast Asia to support its steel sector.
India's Steel Industry Strategy
· Shifting to High-Value Steel: Indian manufacturers are focusing on premium specialty steel with higher margins and less competition from China.
· Diversifying Coking Coal Imports:
o Australia’s share in India's coking coal imports dropped from 80% to 62% by 2024.
o India is increasing imports from Canada, Russia, Mongolia, Mozambique, and the U.S..
Green Steel & Investment Plans
· India plans to invest $20-25 billion in steel decarbonization, using green bonds, preferential loans, and public-private partnerships.
· The government will soon launch production-linked incentives (PLI) to promote low-carbon steel manufacturing, aligning with sustainability goals.
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