New Delhi, Mar 4 (PTI) The imposition of tariffs by the US on imports from Mexico, Canada and China will affect the Indian steel industry as the country will become the natural target for cheap Chinese steel at a time when local players are undergoing a major capacity enhancement phase, industry experts said.
The Trump administration imposed 25 per cent tariffs on imports from Mexico and Canada on Tuesday. The US also doubled the tariff on all Chinese imports to 20 per cent.
“USA under the new President has announced new tariffs on China, Mexico and Canada. China is a major steel exporter to the USA. The recently announced US tariffs on steel imports from China means that this export will become unviable and surplus steel will be seeking new markets,” former President of Indian Stainless Steel Development Association (ISSDA) Karan Pahuja said.
“India becomes the natural target for cheap Chinese surplus steel at a time when it is undergoing a major capacity enhancement phase. The Indian steel industry is already facing a cyclic downturn and pressure of imports leading to erosion of margins and endangering expansion plans. Any possibility of increasing imports will set the industry back by years and effect long-term growth of the Indian steel industry,” he explained.
Lalit Beriwala, Director of Shyam Steel Industries Ltd termed the US President Donald Trump’s tariff as a “global trade war” and said that the Indian government is alive to the situation and will take concrete steps to ensure that the steel sector growth continues unhindered notwithstanding the trade war globally.
He further said that India is strong enough to withstand the ripple as far as the steel sector is concerned.
According to Abhyuday Jindal, the Managing Director of Jindal Stainless, the latest Trump announcements could mean two things for India. First the relative competitiveness of Indian producers in supplying to the US may improve, since all countries will be taxed at parity. This may give India a level playing field vis-a-vis other nations.
Second, countries hitherto enjoying exemptions may have excess capacities that they can start diverting to India. Such as automotive and industrial products from Korea, Japan etc. This could be a threat for 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.
