(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.
(KNN Bureau)
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