India reversed a multi-year trend to become a net importer of steel for FY24, with imports exceeding exports by close to 1 million tonnes (mt), a report of the Union Steel Ministry, accessed by businessline, shows.

For the full fiscal year, imports shot up 38 per cent YoY to 8.3 mt. This coincided with lesser-than-expected pick-up in exports, which rose by 12 per cent to 7.5 mt, on a low base.

March incidentally saw a sequential slowdown in exports by 18 per cent ( over February) to 0.9 mt, while imports declined 32 per cent to 0.6 mt.

“FY23 saw depressed steel exports as there was a six month period of duty levy here. So the rise in export actually comes on the back of a low base. And is lower than earlier years such as FY22. And in comparison to these years, imports are up substantially which continues to be a matter of concern,” a ministry official said.

According to him, the trend in imports points to some moderation sequentially. The demand for steel in India is high, which means that a part of domestic requirements are met through imports.

Losing Ground

Historically, the country has been a net exporter of steel, but it has been losing ground in key overseas markets like the Middle East.

Moreover, beyond Europe, Indian steel exports remain depressed primarily because of poor market conditions and stiffer competition from Chinese products, especially speciality or value-added steel.

Even in India, Chinese steel is reportedly being routed through other countries like Vietnam. The Asian nation - once a key buyer - is now amongst India’s top five sellers/importers, according to Ministry’s report.

“Negotiations for ‘melt and pour’ are ongoing to curb imports. While we are working on the product specific rules of origin which will ensure that only those steel products melted and poured in the country with which India has a trade agreement will be allowed,” the Ministry official said adding that this means, FTA benefits are available only to genuine manufacturers in other country rather than those who re-route their products here.

Trade number break-up

As per the Ministry report, non-alloyed steel imports shot up by nearly 70 per cent on a YoY basis to 6.2 mt for FY24, up from 3.9 mt in FY23.

 On the other hand, exports in this category grew by 50 per cent to 7 mt last fiscal, up from 4.5 mt in the year before.

Incidentally, alloy and stainless steel trade - both import and export - saw a significant drop. Imports dropped to 2.1 mt, down 9 per cent over 2.4 mt kn FY23.

The fall in exports was a sharp 68 per cent to 0.7 mt for FY24. In FY23, the segment reported volume sales of 2.3 mt.