Sharp Decline in Imports Amid Rising Domestic Challenges
India’s iron and steel imports fell by 28% in November 2024, dropping to $1.7 billion compared to $2.4 billion the previous year. This sharp decline is attributed to delays in the issuance of No Objection Certificates (NOCs) by the Steel Ministry, a requirement for importing certain steel grades. The delay has hindered MSMEs’ access to affordable steel, sparking concerns over rising domestic prices and supply chain disruptions.
Conflict Between Large Producers and MSMEs
Large steel manufacturers have advocated for safeguard duties on imported steel to protect the domestic market, citing quality concerns under the Quality Control Order (QCO). However, MSMEs argue that such restrictions harm their competitiveness by driving up input costs. Previous arrangements to supply steel at fair prices to MSMEs have not been adhered to, further straining relations between small businesses and major producers.
Rising Steel Imports and Domestic Production Trends
India, the world’s second-largest crude steel producer with 144.3 million tonnes produced in FY24, remains a net importer of finished steel. Imports of finished steel have surged from 4.67 million tonnes in 2021-22 to 8.32 million tonnes in 2023-24, with Chinese imports rising by 80% between January and July 2024. In contrast, exports of finished steel stood at 7.49 million tonnes, highlighting a growing trade imbalance.
Impact on MSME Exporters and Policy Recommendations
MSMEs face liquidity issues and high domestic steel prices, compounded by potential safeguard duties. Industry leaders urge the government to prevent domestic price hikes while protecting local manufacturers, ensuring balanced policies that support both large and small enterprises.
