India’s finance ministry issued an order imposing tariffs ranging from 12% to 30% on certain steel products imported from China and its neighboring country Vietnam, with the aim of protecting and promoting local industries.
According to Reuters, the order issued by India on Tuesday (September 10) will levy taxes on welded stainless steel pipe materials exported by China, the world’s largest steel producer, and its neighboring Vietnam over the next five years.
Since the 2020 border clashes between Indian and Chinese troops in the disputed Himalayan region, the two countries’ relations have been tense. India has been scrutinizing investments from China and halting major projects related to Chinese investments.
However, Indian Foreign Minister Subrahmanyam Jaishankar stated on Tuesday that India “has not turned down business from China,” but the issue lies in which industries Beijing operates in and under what conditions, though he did not provide specific details.
Currently, China’s ongoing real estate crisis has led to a contraction in its construction industry, causing an oversupply of steel. This surplus from China poses concerns for other regions globally as it could lead to dumping, lowering prices of domestic products, forcing factories to shut down and workers to lose their jobs.
Earlier this year, President Biden, in a speech to the United Steelworkers Union, called for higher tariffs on Chinese steel and aluminum. His economic advisor Lael Brainard pointed out that Beijing’s policies leading to overcapacity pose a serious threat to the future of the U.S. steel and aluminum industries. The U.S. government has also begun taking measures to curb the import of Chinese steel through third countries like Mexico.
In August, the Indian government initiated an anti-dumping investigation on certain steel products imported from Vietnam.
Chinese leader Xi Jinping met with Vietnam’s new leader Su Lin in Beijing last month.
As the world’s second-largest crude steel producer, India has turned into a steel net importer in the fiscal year ending in March, a trend continuing in the first four months of the new fiscal year starting in April.
Indian Steel Minister stated last Wednesday (September 4) that he would strive to persuade the finance ministry to raise steel import tariffs to shield domestic steel mills from the impact of cheap imports from countries like China.
From April to July, China became India’s largest steel exporter, shipping around 807,000 tonnes of steel to India, followed by Japan and South Korea.
During an industry conference, Indian Steel Minister H. D. Kumaraswamy told reporters that multiple measures have been requested from the Steel Ministry to protect the industry from the impact of cheap imports, including raising tariffs on imported steel as demanded by the industry.
Kumaraswamy noted, “Our steel industry is facing many challenges and is undergoing difficulties.”
Meanwhile, major Indian steel producers like JSW Steel and Tata Steel have expressed that the industry is in discussions with the government regarding trade measures.
According to data from commodity consulting firm BigMint, due to increased imports and weak exports, steel prices in India have plummeted to their lowest levels in over three years.