Why Modi government might levy import tariff on steel products
What's the story
India, the world's second-largest producer of crude steel, is mulling an import tariff on certain steel products. The move is aimed at countering cheaper imports from China. A source with knowledge of the matter told Reuters that "it (tariff) is under consideration." The potential tariff follows a recommendation made in August for a three-year import duty of 11-12% on select steel items.
Tariff history
Previous tariff and current steel import trends
In April, the Indian government had imposed a temporary 12% tariff for 200 days, which lapsed earlier this month. As a result, India's finished steel imports in the first seven months of this year were down 34.1% YoY. South Korea topped the list of finished steel exporters to India during this period with 1.4 million metric tons, followed by China, Japan, and Russia.
Export impact
China's steel exports and production cuts
The source cited China's steel exports as a reason for India's vulnerability, mainly due to their lower prices. However, China's steel output is expected to fall below one billion tons this year for the first time in six years. This decline aligns with the government's commitment to cut production. In late October, Beijing proposed a stricter steel capacity swap plan aimed at reducing excess capacity and balancing supply-demand dynamics in the industry.