Industry executives stress that in order to guarantee fair competition for domestic manufacturers in India’s steel sector, strong policy enablers are required. India is still pushing for capital expenditures, as evidenced by the astounding ₹11 lakh crore it spent on infrastructure last year, which was mostly funded by public investment. Nonetheless, important sector participants emphasize that regulatory actions are necessary to safeguard homegrown producers from unfairly priced imports and to maintain long-term expansion.
Credits: trak.in
Jayant Acharya, Deputy MD of JSW Steel, and Kaushik Chatterjee, Executive Director and CFO of Tata Steel, emphasize the significance of safeguard responsibilities in promoting capital expenditure (capex) investments in the industry and preventing unfair trade practices.
India’s Growth Trajectory and Steel Sector Opportunities
Chatterjee asserts that India is on a “multi-decadal growth path” with infrastructure spending playing a significant role. He points out that while heavy capital expenditure presents immense opportunities for the steel sector, the industry’s global exposure necessitates protective policies.
He stated, “We had about ₹11 lakh crore spending on infrastructure, and public spending is a big part of this push. From a heavy capex perspective, there are opportunities to grow, but in a globally exposed industry like steel, we need to ensure that policy enablers do not leave us vulnerable to unfairly priced imports.”
Despite concerns over weaknesses in domestic demand, there remains optimism regarding the steel industry’s potential, particularly with expected growth in the infrastructure and automotive sectors.
Impact of China’s Steel Exports on Global Trade
A key challenge facing India’s steel sector is the surge in China’s steel exports, which have risen dramatically from their usual 60–70 million tonnes (MT) to over 110 MT. This has significantly impacted global trade and steel pricing.
As over 30 countries investigate China’s steel exports, India’s response will be crucial in shaping policies that safeguard capital expenditure stability and domestic market competitiveness. Acharya shares concerns that trade flows from China and Free Trade Agreement (FTA) nations could disrupt India’s steel market despite strong local demand.
Strengthening Domestic Production and Investment
India’s steel industry is preparing for an estimated incremental demand of 15 MT annually. Industry leaders believe that substantial investments are necessary to capitalize on this demand and drive future growth.
Acharya remarked, “Indian demand, as Kaushik rightly said, looks very promising in the medium term. India is on a strong growth trajectory, and the steel industry has a significant opportunity ahead.”
While the government has maintained its infrastructure budget at ₹11 lakh crore with a 10–17% increase, Acharya acknowledges that while beneficial for consumption, higher capital expenditure would have further accelerated industry growth.
Government Policies and Market Protection Strategies
For the steel industry to thrive, policies must focus on fostering competitiveness while protecting domestic manufacturers. Government intervention through safeguard duties, anti-dumping measures, and tariff regulations will be crucial in mitigating the impact of foreign steel imports.
Industry leaders have called for increased monitoring of Free Trade Agreement (FTA) benefits and their impact on Indian steel producers. While FTAs aim to promote cross-border trade, they may inadvertently favor countries with lower production costs, making it harder for Indian manufacturers to compete fairly.
The government has been proactive in promoting domestic manufacturing under the ‘Atmanirbhar Bharat’ initiative. Strengthening local supply chains and reducing dependency on imports will further boost India’s self-reliance in steel production. Additionally, incentives for research and development in the steel sector could drive innovation and improve efficiency.
Credits: Recycling Today
The Road Ahead: Balancing Policy and Market Dynamics
For India’s steel industry to thrive, a delicate balance between policy measures and market dynamics is essential. Implementing safeguard duties, monitoring trade flows, and ensuring domestic manufacturers have a level playing field will be critical in maintaining the sector’s growth momentum.
With strong infrastructure spending and anticipated industrial growth, India’s steel sector has the potential to be a global powerhouse. However, strategic policy interventions will be the key to sustaining competitiveness and securing long-term success in an increasingly complex global market.
