US Tariffs Action to Make India Target for Cheap Chinese Steel, Say Industry Players
The US Tariffs Action: A Game-Changer for the Indian Steel Industry?
The introduction of tariffs by the US on imports from Mexico, Canada, and China has sent shockwaves across the global steel industry, including India. According to industry experts, the US tariffs action may lead India to become the new target for cheap Chinese steel, posing a significant threat to the country’s steel sector.
US Tariffs: Global Trade War Spurs Remote Consequences for India’s Steel Industry
The Trump administration’s decision to impose 25% tariffs on imports from Mexico and Canada, and double the tariffs on all Chinese imports to 20% will have far-reaching consequences for the Indian steel industry. As China is a major steel exporter to the US, the recently announced US tariffs on steel imports from China will make it difficult for Chinese steel exports to the US market.
India’s Steel Industry: The Unwelcome Target for Cheap Chinese Steel
"India will become the natural target for cheap Chinese surplus steel at a time when it is undergoing a major capacity enhancement phase," stated Karan Pahuja, former President of Indian Stainless Steel Development Association (ISSDA). Pahuja warned that the Indian steel industry is already facing a cyclic downturn and the pressure of imports will lead to erosion of margins and endanger expansion plans.
But India Can Withstand the Storm, Says Lalit Beriwala
Lalit Beriwala, Director of Shyam Steel Industries Ltd, views the US President Donald Trump’s tariff as a "global trade war" and believes that the Indian government will take concrete steps to ensure the steel sector growth remains unaffected. "India is strong enough to withstand the ripple as far as the steel sector is concerned," he assured.
A Mixed Bag for India’s Steel Industry
According to Abhyuday Jindal, Managing Director of Jindal Stainless, the latest Trump announcements could mean two things for India. Firstly, the relative competitiveness of Indian producers in supplying to the US may improve, giving India a level playing field vis-a-vis other nations. Secondly, countries hitherto enjoying exemptions may have excess capacities that they can start diverting to India.
A Double-Edged Sword for the Indian Steel Industry
Jindal warned that such a scenario could pose a threat to domestic sales, especially where the Indian steel and stainless steel industry has no level playing field against imports. "So, for stainless steel, there could be pros for exports and cons for domestic sales – and it’s hard to say at this point in time how it will exactly play out," he said.
A Need for Caution and Prudence
In light of the US tariffs action, it is essential for the Indian government to exercise caution and prudence to shield the steel sector from the potential fallout. By taking proactive measures to promote domestic production, ensure level playing field, and strengthen export infrastructure, the Indian government can navigate the complex global trade landscape and maintain the steel sector’s growth trajectory.
Conclusion
The US tariffs action may have far-reaching consequences for the Indian steel industry, which is already grappling with the challenges of excess capacity, low prices, and import dependence. As the trade war intensifies, it is crucial for the Indian government to take a proactive role in supporting the sector and ensuring that it remains resilient in the face of global uncertainties. By doing so, India can maintain its position as a key player in the global steel market and create a sustainable growth trajectory for the industry.
US tariffs action to make India target for cheap Chinese steel, say industry players.
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