Dealing with Unsold Steel Inventory Amid Rising Imports: Insights and Measures
Steel is a deregulated sector in India, with the government playing a supportive role by fostering a policy environment conducive to growth. Steel companies autonomously make import and export decisions, driven by techno-commercial considerations and market dynamics. Tariffs can also impact these decisions significantly. Here’s a comprehensive look at the current state of unsold inventory and the measures in place to boost the domestic steel industry.
Steel Inventory Overview
Indian Steel Companies have reported their stock of finished steel for the last five financial years and the current year as follows:
| As on | Finished Steel Stock (in MnT) | |
| 31.03.2020 | 13.69 | |
| 31.03.2021 | 8.97 | |
| 31.03.2022 | 7.99 | |
| 31.03.2023 | 10.59 | |
| 31.03.2024 | 14.29 | |
| 30.11.2024* | 14.23 | |
| Source: Joint Plant Committee(JPC); *provisional | ||
Tariffs and Anti-Dumping Measures in Steel Industry
The following tariffs and measures protect the domestic steel industry from import challenges:
- Custom Duties: Basic customs duty on steel products ranges from 5% to 15%. Certain US imports face a duty between 20% and 27.5%.
- Anti-Dumping Duties: Enforced on products like seamless tubes, pipes from China, and electro-galvanized steel from Korea, Japan, and more.
- Countervailing Duties: Applied on welded stainless steel pipes and tubes from China and Vietnam.
Union Budget 2024-25 Initiatives Affecting the Steel Industry
- Ferro-Nickel and Molybdenum: Basic customs duty reduced from 2.5% to nil.
- Ferrous Scrap: Duty-free status extended to 31.03.2026.
- CRGO Steel Materials: Duty exemption extended to specified raw materials until 31.03.2026.
Government Actions to Support Domestic Steel
- DMI&SP Policy: Promotes ‘Made in India’ steel for government procurement.
- PLI Scheme for Specialty Steel: Aims to reduce imports and boost investment by Rs. 27,106 crores.
- Enhanced Steel Import Monitoring System (SIMS) 2.0: Improves import monitoring to protect domestic interests.
- Steel Scrap Recycling Policy: Increases availability of domestic scrap for the steel industry.
- Steel Quality Control Order: Ensures only quality steels conforming to BIS standards are available, with 151 standards notified under the order.
These efforts collectively aim to mitigate the impact of rising imports, address unsold inventory issues, and bolster the competitiveness of India’s steel sector through various tariffs and measures.
References & Related Articles:
- Press Information Bureau – Ministry of Steel
- Business Standard – Capacity utilisation of domestic steel may hit 4-year low in FY25: ICRA
- Economic Times – Quality compliance certificates for Chinese steelmakers soon
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