India has once again set its sights on China's steel, and after using unconventional means to suppress Chinese mobile phones, the Central Committee | India | Mobile

After constantly targeting Chinese mobile phones, India has once again set its sights on China's steel.

The Chairman of the Central Committee for Indirect Taxation and Customs in India, Joli, recently stated that the Indian Ministry of Finance is reviewing the proposal to levy a Chinese steel countervailing duty. The Central Committee for Indirect Taxation and Customs in India is a subsidiary department of the Indian Ministry of Finance.

With the growth of the Indian economy, there is a significant increase in demand for Chinese steel, especially high-quality steel. According to the latest released data, in April 2023, India imported the highest amount of finished steel from China in five years.

Regarding this new trend, Liu Zongyi, Secretary General of the China and South Asia Research Center at the Shanghai Institute of International Studies, told First Financial reporters that China's steel production ranks first in the world, and many products are of good quality and affordable, which naturally creates competition for similar products in India. "India uses tariffs as barriers, on the one hand, to protect domestic industries, and on the other hand, to narrow its trade deficit with China."

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India's renewed focus on Chinese steel

According to Indian data, India imported a total of 500000 tons of finished steel in April, the highest level since 2019, with a year-on-year increase of 38.2%. The finished steel products exported by China to India are mainly cold-rolled steel plates used in automobiles, household appliances, and durable consumer goods, as well as electrical steel plates and pipeline steel. In that month, China's exports of steel products to India accounted for nearly a quarter of India's total imports of finished steel, a year-on-year increase of nearly 80%.

Previously, the Indian Trade Relief Administration proposed to impose a countervailing duty on Chinese imported steel products. Some Indian steel companies claim that Chinese steel enjoys subsidies and is priced 30% to 40% lower than Indian produced steel, giving it a high market advantage compared to similar products in India. With a large influx of products into the market, local steel manufactured by small and medium-sized enterprises in India has become unsold, and their capacity utilization rate has only reached 30%.

In the bilateral trade between China and India in 2022, China's exports to India further increased, mainly due to the expansion of India's domestic demand after the epidemic, and with the upgrading of India's economy, the demand for Chinese intermediate products further expanded. However, in 2022, China's imports from India significantly decreased, leading to a further widening of India's trade deficit with China. India has been trying to reduce the deficit through various means.

In fact, this is not the first time India has set its sights on Chinese steel. On July 4, 2017, India made a final affirmative determination of anti subsidy against Chinese hot-rolled and cold-rolled stainless steel plates, proposing to impose a counter subsidy tax of 18.95% of the import customs declaration price on the products involved in the case in China. On September 7, 2017, India began levying countervailing duties on Chinese products involved in the case.

But in 2021, in order to reduce the production costs of domestic enterprises and promote the recovery of the domestic economy after the epidemic, India cancelled anti-dumping and countervailing duties on some steel products, and lowered import tariffs on steel products. As a major steel importer of India, China has once again exported a large amount of steel products to India, and the steel trade between China and India is expected to prosper in the short term.

The steel trade between China and India is not one-way. As one of the important iron ore producing countries in the world, India is an important source of import for China's iron ore and has contributed significantly to the market supply of low-grade powdered iron ore in China.

India has a high demand for steel

Currently, India is in a wave of infrastructure boom. According to the World Steel Association's forecast, India's steel demand will grow by 6.7% in 2023, to approximately 120 million tons, which will be the fastest growing among major economies in the world.

Indian Prime Minister Modi announced in November 2022 that after eight years of effort, India has become the world's second largest producer of steel. Despite being a major producer of steel, with increasing demand in recent years, India now has to rely on more steel imports to fill the supply gap.

"Any economy needs a large amount of steel and commodities during the stage of national construction," said Acharia, Deputy General Manager of India's largest domestic steel producer, Jingdele Southwest Steel Company. "India is going through this stage, and by 2030, India's annual steel consumption may increase to over 200 million tons."

The current level of urbanization in India is still relatively low. With the steady advancement of urbanization in the future, the domestic steel consumption in India will further increase. According to a research report by Indian rating agency ICRA, after 10 years of low growth, domestic steel demand in India may be at the forefront of long-term high-speed growth.

The booming demand for steel in India has attracted a group of foreign investment, and New Japan Steel Company and the Mittal family in India have formed a joint venture. Korean steel manufacturers Pohang Steel and Adani Group also plan to establish comprehensive steel mills in India.

However, safety issues are a weakness for Indian steel companies, as inadequate technical training for workers and low awareness of safety production have led to frequent accidents at Indian steel plants. On June 13th, a safety accident occurred in a steel plant of the Tata Group in Orissa, India, where a train derailed and collided earlier. Engineers and workers who were inspecting blast furnaces were injured by molten steel splashing out, and out of 19 injured, 2 were seriously injured.