India's Steel Sector: Government Facilitates Industry Growth, Reduces Imports

Strategic Insights -

The Indian steel sector operates in a deregulated environment, with the government acting as a facilitator by creating a conducive policy environment for its growth. The country is the world's second-largest steel producer, with notable production and export figures during the 2024-25 financial year. The government has implemented various measures to reduce steel imports and enhance domestic manufacturers' competitiveness, including the Domestically Manufactured Iron & Steel Products (DMI&SP) Policy, Production Linked Incentive (PLI) Scheme for Specialty Steel, and Steel Quality Control Order.

Key Takeaways:

  • The government has implemented the Domestically Manufactured Iron & Steel Products (DMI&SP) Policy to promote 'Made in India' steel for government procurement, aiming to reduce dependence on imports.
  • The Production Linked Incentive (PLI) Scheme for Specialty Steel was launched to promote the manufacturing of specialty steel within the country, reducing imports and attracting capital investments.
  • The government has banned sub-standard/defective steel products through the Steel Quality Control Order, ensuring the availability of quality steel to the industry, users, and public.
  • The Basic Customs Duty (BCD) on Ferro-Nickel, Molybdenum ores, and concentrates has been reduced from 2.5% to nil, and exemptions on Ferrous Scrap and raw materials for CRGO steel have been extended.
  • Anti-Dumping Duty (ADD) measures are in place for steel products from China, Korea, Japan, and Vietnam, and Countervailing Duty (CVD) is imposed on Welded Stainless Steel Pipes and Tubes from China and Vietnam.
  • A provisional safeguard duty of 12% ad valorem has been imposed on imports of certain Non-Alloy and Alloy Steel Flat Products for 200 days.
  • The Steel Import Monitoring System (SIMS) 2.0 was launched on 25.07.2024 to effectively monitor imports and address domestic steel industry concerns.

Statistics:

  • India produced 146.69 million metric tons (MnT) of finished steel and exported 4.86 MnT in 2024-25.
  • The government has aimed to reduce steel imports and enhance domestic competitiveness through various measures.
  • The Basic Customs Duty on Ferro-Nickel and Molybdenum ores/concentrates has been reduced from 2.5% to nil.
  • Ferrous Scrap and raw materials for CRGO steel are exempt from Basic Customs Duty up to 31.03.2026.

Sources:

  • Shri H.D. Kumarswamy, Minister of Steel & Heavy Industries, in a written reply in the Lok Sabha.
  • Union Budget 2024-25.
  • Steel Quality Control Order.
  • Production Linked Incentive (PLI) Scheme for Specialty Steel.
  • Domestically Manufactured Iron & Steel Products (DMI&SP) Policy.
  • Steel Import Monitoring System (SIMS) 2.0.
  • Anti-Dumping Duty (ADD) measures on steel products from China, Korea, Japan, and Vietnam.
  • Countervailing Duty (CVD) on Welded Stainless Steel Pipes and Tubes from China and Vietnam.
  • Provisional safeguard duty on Non-Alloy and Alloy Steel Flat Products.