Sajjan Jindal, chairman and managing director of JSW Group, has voiced serious concerns about the growing influx of Chinese steel into India, primarily through Free Trade Agreement (FTA) routes involving Association of Southeast Asian Nations or ASEAN countries.
Speaking exclusively to Moneycontrol, Jindal said that China’s overcapacity in steel production is flooding global markets, with the country’s exports matching India’s entire steel production output. The issue, however, is not limited to direct imports from China but is exacerbated by a loophole allowing Chinese steel to enter India indirectly through third-party nations that have trade agreements with India.
“The amount of steel China exports is equivalent to India’s entire production capacity. Although Chinese steel faces tariffs in the U.S. and Europe, it is still entering India through countries with which we have FTAs” Jindal said.
He emphasized that this practice undermines the integrity of India’s steel industry and presents a direct challenge to local manufacturers.
While China likely faces significant tariffs on its steel exports in key markets such as the U.S. and Europe, the country has found a way to circumvent these restrictions by exporting steel to other countries which have FTAs with India. “These countries import Chinese steel for their domestic needs and then export their own steel to India without tariffs, effectively allowing Chinese steel to enter the Indian market duty-free,” JIndal alleged.
The JSW Group, one of the largest steel manufacturers in India, has been vocal in its representation to the Indian government about the adverse impact of this practice. According to Jindal, the government is well aware of the problem, and discussions are underway to find a solution.
“We’ve raised this issue with the government, and they understand the problem. They are working on finding a solution, but as of now, no final decision has been reached,” Jindal added.
The rise in Chinese steel imports, facilitated by these trade routes, has been a point of contention for Indian steel manufacturers who argue that the practice is harming domestic production and stifling growth. Jindal’s comments highlight the broader challenge faced by India’s manufacturing sector in dealing with the complexities of global trade policies and the impact of overproduction in other countries.
The Indian steel industry has long faced competition from cheaper imports, particularly from China, which is the world’s largest producer of steel. With the Indian government’s support, however, Jindal said that he remains optimistic about a potential resolution.
Notably, in May 2022, the Indian government imposed a 15% export duty on certain steel products and iron ore in an effort to manage domestic steel prices and inflation while increasing steel availability in the local market. The government’s objective with these measures was to curb rising steel prices and ease inflationary pressures while ensuring that there was sufficient steel available in the domestic market to meet growing demand.
Alongside these export duties, the government also reduced import duties on three critical raw materials used in steel production to help lower production costs for domestic manufacturers. The export duty hike was rolled back in November 2022 which was widely welcomed by steel manufacturers.
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