After unconventional means to suppress Chinese-funded mobile phones, India has "targeted" China's steel

After constantly attacking Chinese mobile phones, India has set its sights on Chinese steel.

Vivek Johri, chairman of India's Central Committee on Indirect Taxes and Customs (CBIC), said recently that India's finance ministry is reviewing proposals to impose countervailing duties on Chinese steel. The Central Board of Indirect Taxes and Customs of India is a subdivision of the Ministry of Finance of India.

With the growth of India's economy, the demand for Chinese steel, especially high-quality steel, has increased significantly. In April 2023, India imported a five-year record amount of finished steel from China, according to the latest released data.

For this new trend, Liu Zongyi, secretary-general of the China and South Asia Research Center of the Shanghai Institute of International Studies, told the first financial reporter that China's steel production ranks first in the world, and many products are of high quality and low price, which naturally constitutes competition for similar products in India, "India uses tariffs as a barrier, on the one hand, to protect domestic industries, on the other hand, to narrow the trade deficit with China." ”

India is once again eyeing Chinese steel

India imported a total of 500,000 tonnes of finished steel in April, the highest level since 2019, up 38.2% year-on-year, Indian data showed. China's finished steel exports to India are mainly cold-rolled steel sheets for automobiles, home appliances and consumer durables, as well as electric steel sheets and steel for pipelines. In the same month, China's steel exports to India accounted for nearly a quarter of India's total finished steel imports, an increase of nearly 80% year-on-year.

Earlier, the General Administration of Trade Remedies (DGTR) proposed to impose countervailing duties on Chinese steel imports. Some Indian steel companies allege that Chinese steel enjoys subsidies, the price is lower than 30% to 40% of India-made steel, so it has a high market advantage over similar products in India, with a large number of products into the market, resulting in Indian small and medium-sized enterprises manufacturing local steel unsold, these enterprises capacity utilization rate only reached 30%.

In the bilateral trade between China and India in 2022, China's exports to India further increased, mainly due to the expansion of domestic demand in India after the epidemic, and the demand for Chinese intermediate goods further expanded with the upgrading of India's economy. However, in 2022, China's imports from India will be significantly reduced, resulting in a further widening of India's trade deficit with China, and India has been trying to reduce the deficit through various methods.

In fact, this is not the first time India has "eyed" Chinese steel. On July 4, 2017, India issued a countervailing duty of 18.95% of the import customs declared price of the products involved in the Chinese case. On September 7, 2017, India began imposing countervailing duties on the products involved in the Chinese case.

However, in 2021, in order to reduce the production costs of domestic enterprises and promote the recovery of the domestic economy after the epidemic, India abolished anti-dumping duties and countervailing duties on some steel products and reduced import tariffs on steel products. As India's main steel importer, China once again exported a large amount of steel products to India, and the steel trade between China and India ushered in a boom in the short term.

The steel trade between China and India is not one-way. As one of the world's important iron ore producers, India is an important source of iron ore imports from China, contributing to the market supply of China's low-grade powdered iron ore.

India has a large demand for steel

At present, India is in the midst of a boom in infrastructure construction. India's steel demand will grow by 6.7% to about 120 million tonnes in 2023, according to worldsteel, which will be the fastest growth among the world's major economies.

Indian Prime Minister Narendra Modi announced in November 2022 that after eight years of efforts, India has become the world's second largest steel producer. Despite being a major steel producer, India now has to rely on more steel imports to fill the supply gap as demand has grown in recent years.

Jayant Acharya, deputy managing director of JSW Steel, India's largest steel producer, said: "Any economy needs a lot of steel and commodities during the country's vigorous construction phase. India is going through this stage, and by 2030, India's annual steel consumption may increase to more than 200 million tons. ”

India's current level of urbanization is still low. With the steady advancement of urbanization in the future, India's domestic steel consumption will further rise. According to a research report by India's rating agency ICRA, after 10 years of low growth, India's domestic steel demand may be on the cusp of long-term high growth.

India's booming steel demand has attracted a number of foreign investments, New Nippon Steel and the Mittal family have become joint ventures, and South Korean steelmakers POSCO and Adani Group are also planning to build integrated steelmaking plants in India.

However, safety issues are the weakness of Indian steel companies, due to insufficient technical training of workers and low awareness of safety production, resulting in frequent accidents in Indian steel plants. On June 13, in a safety accident at a steel plant in India's Tata Group, in the state of Orissa where the train derailment crashed, engineers and workers inspecting blast furnaces were injured by a splash of molten steel, and two of the 19 injured were seriously injured.