The Need Of The Hour

The tariff war unleashed by US and the European Union and the retaliatory steps being planned by neighbouring steel producing countries will have ripple effect on the domestic steel industry. The domestic steel industry fears the excess steel producing countries will dump their products in the Indian market and to keep its ships floating the Indian steel manufacturers have asked the government to impose safeguard duties.

Steel is one of the core sectors whose consumption has a direct relation with the growth of infrastructure industry in India. According to IBEF report India is slated to surpass USA to become the world’s second largest steel consumer in 2019. In FY18, India produced 104.98 million tonnes and 103.13 million tonnes of finished steel and crude steel, respectively. Crude steel production between April 2018-February 2019 reached 97.15 million tonnes. In FY18 India was also a net exporter of steel. According to a report by CARE Ratings, the finished steel production in India increased by 5.9 percent to 100.9 million tonnes during the period April 2018-February 2019 compared to the corresponding period a year ago where the output stood at 95.3 million tonnes. Demand for steel in India grew by 7.4 percent y-o-y to 88.1 million tonnes during April 2018-February 2019. India which was net exporter of steel during the period April 2017-February 2018 turned net importer of steel in the current financial year. The country’s imports exceeded exports by 1.4 million tonnes during the period April 2018-February 2019. While imports increased by 1.9 percent y-o-y to 7.1 million tonnes, exports declined by a sharp 35.2 percent to 5.8 million tonnes. Higher domestic consumption coupled with higher domestic prices is believed to have limited outbound shipments during the year.