Indian stainless steel manufacturers are seeking the government’s help to ensure that sectors like automobile, utensils procure locally manufactured steel, rather than importing cheap steel from overseas.
They want the assurance that the relaxation on stainless steel imports, allowing the sale of non-BIS-compliant steel products, won’t be extended beyond December 31, so that Indian steel manufacturers can sell their products to the industries.
“The auto and utensils manufacturers should procure steel locally, rather than buying it from Japan, Korea, China and other countries. India has enough capacity to meet the demand. Domestically manufactured steel can be used,” said Rajamani Krishnamurti, President Indian Stainless Steel Development Association (ISSDA).
The government has extended the relaxation on stainless steel imports till December 31, allowing sale of non-BIS-compliant products to ease raw material shortages. This creates a non-level playing field for foreign steel manufacturers, who can continue to supply non-BIS-compliant input materials, particularly semi-finished products to India, while domestic mills remain bound by strict BIS quality standards. Local steel manufacturers cautioned that the domestic industry is buying overseas steel at 20-25% cheaper rate, and thus, they are not willing to buy locally manufactured steel.
The steel ministry said the move was needed due to limited local output, though domestic makers fear prolonged relaxations could hurt long-term market stability. Local manufacturers have assured that there will be no dearth of the output to meet the demand going forward, as they have up scaled their production significantly.
Not only for stainless steel, but overall a surge in low-cost steel imports is hurting India’s domestic producers. As per media reports, around 150 mills have been shut down and another 50 have cut output.
With local prices near five-year lows, small and medium units — contributing nearly half of India’s steel output — are struggling to survive. “There is no level playing field for India. Freight cost and capital cost are too high in India. Steel is a power-intensive sector. In China, the power cost is just 4 cents, while it is 11 cents (USD 0.11) per unit (kWh) in India. For Indian manufacturers, it is not possible to sell at the predatory pricing like China does,” said Krishnamurti.
It must be noted that the Central government has imposed a 12% safeguard duty on imports of certain flat steel products in April to prevent the dumping of cheaper steel. However, developing countries are exempt from this duty.