Government has to be ready to step in if steel imports surge
After almost two years of dip in imports, there seems to be a comeback for foreign steel on Indian shores.
The import of steel in the recent past has to be looked at in the context of what has happened in the past two years post MIP and some of the measures which government took to curb import of steel at very cheap prices.
In 2016-17 and 2017-18, India became a net exporter of steel. We were net exporters to the tune of 1.5 million tonnes since 2016-17 and about 3 million tonnes in 2017-18. In the current year, so far in the first five months, there is no big surge in imports because overall import level is more or less the same as in the corresponding period of last year.
Exports have dipped by almost 30% and consequently in the first five months of current year imports are higher than exports. We are again becoming a net importing country and this is certainly a worrying signal. Although large imports are not seen right now, but certainly it can happen. More than the duty imposed by US, what can impact India are the measures which have been taken by the European Union.
Going by the strong domestic demand, there was incentive for domestic producers to supply more in the domestic market. But as I said, some of the signs which we have to track exports to EU markets. As we substantially export steel to EU countries and since this trigger is there, importers in EU will be very cautious as that deadline approaches. If in any of the product categories, the average imports reach that level, they will hold shipments into EU from countries like India and that will impact our exports. So, there are multiple factors. Robustness of domestic demand is one of the factors which has led to somewhat lower exports in the first quarter and subsequent two months.