Steel import curbs key in Indian steel industry’s budget asks for FY 2025-26

The Indian Steel Association urged the government to double the basic customs duty on steel imports in its upcoming union budget for financial year 2025-26, according to a source with knowledge of the matter.

The government will announce the Union Budget of financial year 2025-26 on Feb. 1.

The association, an apex body representing primary steel manufacturers, has asked for an increase in the basic customs duty on steel imports to 15% from 7.5% amid an inflow of material in the country that had led to a supply glut and pulled down prices in recent months.

India was a net steel importer in the financial year 2023-24 and for the first nine months of the financial year 2024-25. India's total finished steel imports stood at 7.4 million mt during April-December 2024-25. Major importers during the year were China, South Korea, Japan and Vietnam.

This has led the steel industry to call for safeguarding the domestic market with many steelmakers citing concerns over expansion plans due to weaker margins. India's Steel Minister H D Kumaraswamy also acknowledged the same in September 2024 and vowed to help increase the duty on Chinese steel imports to 10%-12% from the current 7.5%.

The increased imports prompted the association to initiate a safeguard investigation on imports of non-alloy and alloy steel flat products in December and an antidumping investigation on Vietnamese hot-rolled flat products in August.

Everyone is hoping for an imposition of safeguard duty on steel imports soon, a Mumbai-based trader said, adding "[an increase in] capital expenditure is not something that is viable if we are not protected against this cheap dumping."

Platts assessed the spot price of IS2062, 2.5-10 mm thick hot-rolled coil, excluding an 18% goods and services tax, at Rupees 48,750/mt ($563/mt) ex-works Mumbai Jan. 28. Notably, HRC prices were at Rupees 46,750/mt on Sept. 26, 2024, marking the lowest level in nearly four years since the previous low of Rupees 45,750/mt recorded on Nov. 18, 2020, according to S&P Global Commodity Insights data.

The inflow has not been the only factor weighing on Indian steel consumption, according to market participants, as a lack of sufficient infrastructure projects has stemmed the growth in steel demand last year.

General elections in India in 2024 had curbed infrastructure projects in the country for the first six months of the year, while it failed to pick up in the second half.

The budget allocations for infrastructure were not completely utilized and the international markets were weaker, which affected demand and exports, a western India-based distributor said, hoping that the government will give a push to infrastructure as well as capital expenditure in the upcoming budget.

Platts assessed the IS1786 Fe500D/Fe550D 12-25 mm diameter rebar, excluding 18% GST, at Rupees 45,100/mt ex-works Raipur Jan. 28. Rebar prices had touched at least over two-year lows on July 26, 2024, at Rupees 43,900/mt -- the lowest since Platts, part of Commodity Insights, first started assessing ex-works Raipur rebar prices.

Industry participants hope that government measures will stimulate demand, stabilize market imbalances and support the sector's long-term growth.

The association has also sought zero basic customs duty on raw materials such as ferroalloys, steel scrap and graphite electrodes. It further called for the inclusion of chapter 72 iron and steel items under the Remission of Duties and Taxes on Exported Products initiative, which offers refunds on central, state and local duties and taxes to help make steel products competitive in the export market.