India to monitor steel imports for two months before deciding on fresh curbs

India will continue to monitor steel imports for at least the next two months before deciding whether additional measures are required to stem rising shipments, particularly from China, news agency Reuters reported citing sources.

The move comes despite the government's efforts to protect domestic producers. In December, New Delhi imposed a three-year safeguard duty on select steel products to counter the influx of low-priced imports, mainly from China.

However, the measures have so far had limited impact. India, the world's second-largest crude steel producer, remained a net importer of finished steel for the second consecutive month in May, according to a government report reviewed by Reuters.

Finished steel imports stood at 0.7 million metric tonnes in May, exceeding the average monthly imports recorded over the previous six months. In contrast, exports of finished steel fell to 0.5 million metric tonnes, below the six-month average, indicating continued pressure on domestic producers.

Officials are now assessing whether the existing measures are sufficient or if stronger action is needed. "We will have to see for at least two months how things pan out," the source said, adding that no decision has been taken on the nature of any future action.

MUST READ: Vedanta Iron & Steel, Ola Electric, Groww, South Indian Bank shares: Expert outlines stock-specific approach

According to the report, authorities have not yet decided whether any new measures would involve anti-dumping duties or alternative trade remedies. The Ministry of Steel did not immediately respond to Reuters' request for comment.

Concerns among Indian steelmakers have intensified after Chinese exports to India surged in recent months. In April, shipments of finished steel from China to India more than doubled from a year earlier, reaching their highest level in at least two years. Industry participants have argued that existing tariff measures have not adequately shielded domestic manufacturers from cheap imports.

Anti-dumping duty

Separately, the steel ministry has reportedly urged the finance ministry to withdraw the provisional anti-dumping duty imposed on low-ash metallurgical coke, a key raw material used in steelmaking.

The ministry's request is based on concerns over insufficient domestic availability and elevated prices, which could increase production costs for steel manufacturers. Reuters had reported earlier that the recommendation was contained in an official government document.

While a final decision on the matter is still pending, the developments underscore the balancing act facing policymakers as they seek to protect domestic steelmakers without disrupting raw material supplies or raising input costs for the industry.

MUST READ: Vedanta, Nalco, Hindalco, Hind Zinc, Tata Steel shares down up to 9% today; here's why

India's rising steel imports

According to a report in Mint, India's rising steel imports are being driven not by construction or automobile demand, but by a surge in orders for steel pipes used in pipeline projects across West Asia. Countries such as Saudi Arabia are ramping up investments in oil, gas and water infrastructure to strengthen energy security and expand desalination and distribution networks.

Indian pipe manufacturers, including Welspun Corp and Jindal Saw, are benefiting from this demand and expect strong growth opportunities in West Asia and North America. Executives at both companies have highlighted strong tailwinds from rising investments in new and replacement pipeline infrastructure, Mint reported.

However, fulfilling these export orders requires specialized high-grade steel, much of which is still imported from China, Japan and South Korea. Citing commodities intelligence firm BigMint, the report said some critical steel grades required for oil and gas pipelines are either not manufactured domestically or have yet to receive the necessary certifications from end users.

MUST READ: India's core sector growth slows to 0.5% YoY in May as energy output weakens 

As a result, pipe makers are relying on imports, often under the Advance Authorisation Scheme that allows duty-free imports for export production. Most of these shipments are routed through India's western coast and are ultimately used in overseas projects, particularly in West Asia.

Mint reported that India's finished steel imports rose 45% year-on-year to 1.37 million tonnes in the first two months of FY27, outpacing the 27.4% increase in exports. Import growth accelerated from 31% in April to 63% in May, according to Elara Securities.

Analysts expect imports to remain elevated as strong export enquiries continue to support Indian pipe makers. The trend points to an increasingly bifurcated steel sector, with pipe manufacturers emerging as key beneficiaries of the global infrastructure spending boom even as India remains a net importer of finished steel.

MUST READ: Vedanta Aluminium, BSE, VIL shares in AMFI's largecap list? Vedanta Power, Vedanta O&G, Vedanta Iron likely in smallcap category