In 2018, India imported 8.95 million metric tons of steel as compared to 8.89 million metric tons in 2017. The automobile industries require special grades of steel for manufacturing engine parts, exhaust pipes, and fuel systems. Imports of value-added steel, especially for the auto sector and high-end electrical steel were the major source of imports. Indian steelmaker does not manufacture special grades of steel and thus the domestic auto companies have to rely on South Korean and Japanese steelmakers for the supply whose percentage share has accounted for 47% of the total imports. Foreign steelmakers like POSCO have catered to the need of producing value-added steel for the auto sector.
India’s Ministry of Steel had undertaken steps to curb imports and had also urged local automakers to cut down imports from Japan and South Korea. The government had mandated BIS certification for both domestic and imported steel in order to support domestic producers and compliance with the new rules was extended to April 19. But foreign suppliers were not reluctant to seek BIS certification due to very low volumes in India. Indian steel companies have also sought the imposition of higher duties on some grades of auto steel to restrict the surge in imports. But the automakers are failing to procure the quality of the steel they need from the domestic market and this can force industries to go ahead with buying the entire component.
