Rising domestic demand makes India net steel importer in FY24

In fiscal 2024, India transitioned from a net exporter to a net importer of steel, recording a trade deficit of 1.1 million tonnes. This shift was driven by surging domestic demand, leading to increased imports from China, South Korea, Japan, and Vietnam.

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In a significant shift from its status as a net exporter of steel since fiscal 2017, India has become a net importer in fiscal 2024, recording an overall steel trade deficit of 1.1 million tonnes (MT), according to a CRISIL report. This development underscores a dynamic change in the country’s steel trade landscape, driven by surging domestic demand and increased imports from major steel-producing nations.

India’s imports of finished steel reached 8.3 MT in fiscal 2024, marking a substantial 38% increase YoY. This surge was primarily fueled by imports from China, South Korea, Japan, and Vietnam. Chinese steel imports alone accounted for 2.7 MT, while South Korea and Japan exported 2.6 MT and 1.3 MT of steel to India, respectively. Notably, imports from Vietnam surged by a staggering 130% YoY, positioning Vietnam as a significant steel exporter to India and reversing its previous status as a major importer of Indian steel.

The influx of steel product imports has significantly outpaced India’s export growth. Despite an 11.5% increase in exports of finished steel, totaling approximately 7.5 MT in fiscal 2024, the surge was insufficient to offset the growing volume of imports. The increase in exports came from a low base and was mainly bolstered by the latter half of the fiscal year, particularly the last quarter, where exports rose by 37% YoY.

This shift in steel trade dynamics reflects the robust domestic demand in India, which has led to higher reliance on imported steel to meet its needs. The rising imports from established steel giants such as China, South Korea, and Japan, along with the remarkable increase from Vietnam, indicate a changing landscape where India’s domestic production is struggling to keep pace with consumption.

The CRISIL report highlights the need for India to enhance its steel production capabilities and address the growing demand to regain its status as a net exporter. This development serves as a critical reminder of the ever-evolving nature of global trade and the importance of strategic planning to balance domestic production with international trade requirements.