Tata Steel’s CEO, has sounded an alarm over the influx of cheap Chinese steel into the Indian market, warning that the prolonged import of “unfairly priced” steel could undermine the future of India’s domestic steel industry. According to CEO, while Chinese steel may appear to be competitively priced, it is being sold at levels that do not reflect true market costs. He explained that Chinese producers are willing to sell steel at a loss, a strategy that distorts market dynamics and creates an unfair competitive environment for domestic manufacturers.
He’s concerns come at a time when India’s steel demand is soaring, driven by a surge in infrastructure development, construction, and automotive sectors. The country, which is the world’s second-largest crude steel producer, saw its steel demand reach a seven-year high between April and August. However, despite the growing demand, India remains a net importer of finished steel, with imports from China reaching a seven-year peak. CEO also highlighted that Chinese steel is entering India via Southeast Asia, exacerbating the pressure on local producers.
In response, the Indian government has launched an anti-dumping investigation into certain steel products from Vietnam. The steel industry is also calling for higher import tariffs or safeguard measures to stem the tide of cheap imports and maintain fair competition. These imports are keeping prices for flat steel products within a narrow range, making it difficult for domestic manufacturers to thrive. Despite these challenges, he remains optimistic about the long-term outlook for India’s steel sector, projecting an 8%-9% growth in demand for 2024-25. However, he cautioned that continued unfair competition could undermine the industry’s ability to invest in expanding capacity, which is crucial to meeting future demand. The future of India’s steel industry hinges on the ability to maintain a level playing field and ensure sustainable pricing practices.