(MENAFN-
KNN India) New
Delhi, May 15 (KNN) The Indian steel industry is grappling
with the potential resurgence of cheap steel imports from Vietnam, reigniting
long-standing concerns over the impact on domestic producers.
The Bureau of
Indian Standards (BIS) recently issued a license to Formosa Ha Tinh, a
prominent Vietnamese steel manufacturer and exporter, granting them permission
to resume steel exports to India, according to sources familiar with the
matter.
This development
follows the steel ministry's mandate late last year that required all imported
steel products to obtain BIS licenses and certification, effectively stalling
imports temporarily.
Industry experts
and domestic steel giants have expressed apprehensions about the potential
ramifications of this move. Ranjan Dhar, a senior executive at ArcelorMittal
Nippon Steel (AM/NS) India, warned that the Vietnamese firm's license could
potentially exacerbate steel dumping in the Indian market.
"The
apprehension is that other mills from FTA countries and China may also get a
renewal of their licenses for exporting to India," analysts at BigMint, a
market intelligence firm, stated, highlighting the worrisome factor for Indian
mills.
Vietnam's steel
industry heavily relies on exports, with nearly half of its production being
shipped abroad, according to Dhar. This is partly due to the influx of cheap
Chinese steel flooding the local Vietnamese market, compelling domestic players
to seek alternative global markets.
Government data
reveals that India's domestic crude steel production stood at 143.6 million
tonnes in the fiscal year 2023-24, while consumption reached 136 million
tonnes. However, finished steel imports during the same period grew by 34 per
cent to 8.3 million tonnes compared to the previous year, making India a net
importer of steel.
Vietnam ranks as
the fourth-largest source of steel imports into India, behind South Korea,
China, and Japan, accounting for approximately 10 per cent of the country's
total steel imports in the fiscal year 2023-24.
As the industry
advocates for safeguard measures, including the imposition of import tariffs,
particularly from countries like China, the government maintains its current
stance on the issue. Officials have previously stated that, based on their
analysis, import volumes remain within tolerable thresholds, and the government
continues to closely monitor the situation.
This comes at a time when
the industry is also adapting to the European Union's Carbon Border Adjustment
Mechanism (CBAM), which is expected to impact the country's steel exports to
key European destinations further. Additionally, the industry is exploring
various green steel production methods, aligning with the government's target
of achieving net-zero emissions by 2070.