China’s Steel Dumping: Major Threat to Indian Steel Producers
With an annual production of over 1 billion Metric Tonne (MT), China is the world’s largest Steel producer. However, despite also being the largest consumer of Steel in the world, China’s growing Steel exports have become a matter of concern for local Steel producers in India.
Steel from China is flooding markets in India and around the globe. This poses a serious threat to local Steel producers in these markets.
Why is China Dumping Steel into Foreign Markets?
China’s domestic Steel demand has been shrinking on account of decline of the country’s real estate sector post CoVID. This change has left Chinese steelmakers with massive installed production capacity in place despite a rapidly decreasing local customer base. Interestingly, because of Chinese government policies and subsidies, Chinese steelmakers are able to export and sell their offerings in global markets at competitive prices. This is the prime reason why Chinese Steel in markets like India is affecting local steelmakers.
In 2023 alone, China exported about 94.5 MMT of Steel globally.
Chinese Steel Imports on the Rise
India is among the countries struggling on account of Chinese Steel imports despite being the world’s second largest producer of Steel. To provide perspective, India’s FY-24 crude Steel production stood at 144.30 Million Metric Tonne (MMT), only a fraction of what China produces.
During April-December 2024, India’s finished Steel imports from China stood at 2.1 MMT, which is 13.3% higher as compared to the same period in 2023. In fact, this figure is the highest considering corresponding period of the past 6 years. During the same period, India’s finished Steel exports fell drastically by 24.6% YoY to 3.6 MMT.
Moreover, China, Japan and South Korea taken together accounted for 79% of India’s total Steel imports during April-December 2024.
Indian Steelmakers Grappling with Increasing Chinese Imports
Indian Steel mills, regardless of their scale of production, are bearing the brunt on account of increased Chinese imports. Several Indian Steelmakers have been voicing their concern, and have been advocating the need for protectionist measures.
Mr. Sajjan Jindal, JSW Group Chairman, during the JSW Steel Ltd.’s AGM in July 2024, had said that as a measure against increasing Chinese imports, several countries have raised tax barriers. He mentioned that Steel imports into India are also growing on account of weak global Steel demand as compared to demand in India. Mr. Jindal has been speaking vehemently in favour of taxes to curb excessive influx of Chinese Steel in the Indian market.
JSW Steel, a major Indian Steelmaker, has reportedly been missing its profit estimates for the past 4 financial quarters in a row. Moreover, the company’s Q3 Profit After Tax took a 70% hit on a YoY basis. In fact, recently, the JSW Group decided to enter the non-ferrous metals segment: a move which several media reports mention as a response to the growing woes of Indian Steelmakers on account of growing Chinese imports.
Tata Steel CEO, Mr. T.V.Narendran, while speaking to Reuters in November 2024, had said that growing Chinese Steel imports could affect investments by domestic steelmakers. He explained, “It’s not that Chinese steel is more competitive…they just are able to keep selling steel even at prices at which they lose money, which is obviously unfair competition”.
In a separate interview, Mr. Narendran had asserted, “India should not allow Chinese steel makers to export their problems to us, and the Government must take some actions”.
Mr. Naveen Jindal, President of the Indian Steel Association, had also expressed concerns of China exporting more of its Steel into India, especially after Donald Trump’s win in the US Presidential elections. Given the politics between the two countries, Mr. Jindal said that increased tariffs from US could force China to dump more Steel in India. Only recently, in February 2025, the US President had announced a 25% duty on all Steel and Aluminium entering the United States from foreign shores.
Some media reports mention that this trend of increasing imports has also forced many of India’s small Steel mills to cut production.
Need for Government Intervention to Curb Chinese Steel Imports
Indian Steelmakers had recommended doubling the import duty on finished Steel products from 7.5% to 15% as a measure to curb mass inflow of Chinese Steel. Mr. Naveen Jindal had told CNBC-TV18 during an interview that even a 10-12% duty on Steel imports would not be enough to combat the effects of Chinese Steel dumping at ‘predatory’ prices.
Temporary Tax on Chinese Steel Imports Being Considered
Several media reports quoted the Union Steel Minister, Mr. H.D. Kumaraswamy saying that the Indian Government is mulling over imposing a temporary tax of 15-20% on Chinese Steel imports. In a February interview to Reuters, he said, “Rising Chinese steel imports, often aided by unfair trade practices, pose a serious challenge to Indian manufacturers”.
In December 2024, the Steel Ministry had recommended imposing a 25% safeguard duty on Chinese flat Steel products for the next two years.
However, as of now, none of these measures have been taken.
Fear of Chinese Steel Entering India Indirectly
Another growing concern among Indian steelmakers is the entry of Chinese Steel into the country indirectly, through countries which have Free Trade Agreements with India.
In a December 2024 interview with Moneycontrol, Mr. Sajjan Jindal, had said, “The amount of steel China exports [globally] is equivalent to India’s entire production capacity. Although Chinese steel faces tariffs in the U.S. and Europe, it is still entering India through countries with which we have FTAs”. He explained that China could potentially export its Steel to countries which have an FTA with India, from where it can be exported to India “…without tariffs, effectively allowing Chinese steel to enter the Indian market duty-free”.
A report by the Economic Times dated 17th February 2025 mentions that even if safeguard taxes on Chinese Steel are imposed, it would have little efficacy due to India’s FTA agreements with Japan, South Korea, Mauritius and ASEAN nations. About 62% of India’s Steel imports come via these countries.
India’s Future Steel Outlook at Stake
As per India Brand Equity Foundation (IBEF), the Indian Steel industry accounts for about 2% of the nation’s GDP. India’s Steel demand is growing at around 8-9% annually, indicating a healthy appetite in the industry.
As per the National Steel Policy 2017, India targets an annual Steel production capacity of 300 MMT by FY-31. Steelmakers in India have been making huge investments to increase their production capacities. A September report by Investment Information and Credit Rating Agency (ICRA) Ltd. mentions that a total of 27.5 MMTPA of Steel production capacity is expected to be added between FY-25 and FY-27, out of which 15.6 MMTPA production capacity likely to be added in FY-25 alone.
Given the gravity of the aforementioned situation, it is obvious that if allowed to escalate, Chinese Steel imports would become a tough obstacle in the way of India’s future outlook for the Steel sector.
India, which is expected to grow at upwards of 7% from 2026 onwards, needs to make all efforts at reducing dependence on imported steel since steel in an important, core component in all infrastructure projects, may be be railways, defence, flyovers, buildings or shipyards. The Indian steel industry needs to be protected from predatory pricing of Chinese imports. Otherwise investments in the sector will slow down and impact not only job creation, but also self-sufficiency in steel manufacturing.
