Hit by U.S. tariff, Indian stainless steel players turn to domestic market
Hit by the tariff action by the U.S. administration, India's stainless-steel industry is looking domestically to absorb a bulk of their production that was earmarked for exports to the U.S.
Due to confusion and lack of clarity, exports of stainless steel have been impacted, with the industry finding new ways to deal with the situation. Though U.S. President Donald Trump has paused the reciprocal tariff for 90 days, the 25% tariff imposed on steel and aluminium imports, announced days before, still exists.
'When it comes to tariff, it has made a massive impact for our company and the industry in general. There no clarity because things are changing dramatically every single day. There is no clarity from the customer end or from our end. So, it has led to a global shift in steel trade,' Yash Mehta, CEO, Rajputana Stainless Ltd. said in an interview.
'The tariffs may change and the fear of tariffs changing is causing instability. For now, the challenge is the uncertainty in the mind of both the customers and the vendors, which is India and America for now. Since the last 15 to 20 days, there is silence or probably we would say there is no real business conversation happening with America. So, we see a little pause as of now,' he added.
'And the second concern for Indian market is dumping, because China, being the biggest manufacturer of steel, will definitely try to dump into countries like India, which is again a massive concern for Indian stainless steel manufacturers,' he pointed out.
Mr. Mehta said 10-15% of his company's production was directly or indirectly exported to the U.S. And now he said he was looking at the domestic market to utilise that capacity. 'It [volume earmarked for U.S. market] is going to be mostly consumed in the domestic market and the Middle East market which is pretty decent. The dumping by China to be one fear, we will have the full picture in the next three to four months,' he said.
Industry players said they would deliberate on these subjects at the GSSE Summit which is schedule in June, 2025 to deal with the situation. A segment of the industry believes that the U.S. would continue to import at high duty as they do not have any immediate manufacturing capacity coming up to meet their own consumption. They believe the U.S. market would be still going to be there and it would not 'die immediately.'
According to Nitin Garg, Director Operations, Avtar Steel Ltd., his company, which produces 6,000 tonnes a month, remains unscathed.
'We do not export to the U.S. and we are not seeing any decline in orders from our customers. A few years ago, the U.S. government attempted some safeguard duties. So, Indian manufacturers had adopted themselves according,' he said.
He said despite any likely dumping from China, the Indian players would survive as they had the ability to customise, which China lacked. 'The reason we are surviving is we do a lot of customisation for the customers. Besides Indian government is pushing for use Indian materials to curb imports,' he added.
The domestic demand for stainless steel is rising steadily because of search for sustainable materials. It is increasingly being used in railways, infrastructure projects and processing industries.
'The demand for stainless steel is definitely on the rise. Various private and government sector projects are increasingly using stainless steel,' said C.P. Mangal, Director, Mangalam Worldwide Ltd.
He said the safeguard duty on certain steel imposed by the government on Monday did not apply to stainless steel.
'It is more on the MS and all the low valued items not on the high value items. The duty as such will not have an impact on our industry and products,' he said.
According to the Stainless Steel Development Association, the per capita consumption of stainless steel which was 3.1 kg in fiscal year 2024 is expected to rise to 4.5 to 5.5 kg in fiscal 2030. And a bulk of the domestic demand which is being met by imports is expected to be catered to by local companies.
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