By Admin 
RBI on Steel Industry: The country’s steel sector faces huge challenges during 2023-24 and 2024-25 due to cheap imports and dumping by major global steel producers. This information has been given in the article published in the October 2024 Bulletin of the Reserve Bank of India (RBI).
The article states that the main reason for the increase in steel imports is the decline in import prices, which has adversely affected domestic steel production. The article, titled ‘Steel Under Siege: Understanding the Impact of Dumping on India’, states that dumping of cheap steel from global producers may threaten domestic production, but can be controlled with appropriate policy measures. Recently imposed safeguard duties provide protection against import dumping.
Increased challenge for steel industry
India imported steel products to meet its essential consumption. India’s iron and steel imports increased by 10.7 percent in the first half of 2024-25, while it decreased in the second half, mainly due to safeguard duty. Due to low steel prices in the international market, India registered a 22 percent increase in its steel imports in 2023-24.
India imports about 45 percent of its steel from South Korea (14.6%), China (9.8%), US (7.8%), Japan (7.1%) and UK (6.2%). Steel imports from China, Japan, South Korea, Indonesia and Vietnam increased in 2024-25. Moreover, India’s steel consumption is expected to grow at an average monthly growth rate of 12.9 percent from April 2022 to November 2024.
The article said the gap between domestic consumption and production has widened, and steel prices have declined both domestically and globally since April 2022. Anirban Sanyal and Sanjay Singh, officials of the Statistics and Information Management Department of RBI, have written that in recent times, India’s steel sector has faced challenges due to increasing imports and competitive pricing.
Dumping and low import costs are big factors
These factors affected domestic market share, reduced capacity utilization and increased pressure on domestic producers. Also, the pricing strategies of exporting countries remain a matter of concern for the steel industry. The article suggests that addressing these challenges requires a balanced approach that includes initiatives to enhance the competitiveness of India’s steel production through policy support, innovation, cost efficiency and sustainable practices.
According to the authors, the increase in imports was mainly due to low import prices of steel, which had an adverse impact on domestic steel production. RBI clarified that the views expressed in the article are those of the authors and do not reflect the views of the Reserve Bank of India.
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