India remained a net importer of finished steel for the second consecutive month of FY27, according to provisional data from the steel ministry, reviewed by Mint. This shift in trade flows comes as the ongoing Iran war reshapes global market demand. In May, finished steel imports jumped 62.5% year-on-year to 0.689 million tonnes (mt), while exports rose 29.9% to 0.508 mt, widening the country's trade deficit in finished steel.
Dhruv Goel, chief executive of BigMint, a commodities market intelligence firm, said, “The current imports are largely undertaken by pipe manufacturers located on India’s western coast under the Advance Authorisation Scheme. These imports are primarily meant for re-export, catering to growing demand from the Middle East, where several countries are investing in new oil and gas pipeline infrastructure.”
The Advance Authorisation Scheme allows Indian exporters to import steel (such as coils, sheets, and pipes) duty-free, provided it is physically incorporated into a finished product meant for export.
Goel also said it is unlikely that Chinese steel cargos will be diverted to India as most mills in China do not possess a Bureau of Indian Standards (BIS) certificate, an official document verifying that a product meets Indian quality, safety and reliability standards. The 12% safeguard duty announced at the end of last year also makes those imports unviable, he added.
Finished steel consumption rose 9% year-on-year to 14.328 mt in May, driven by infrastructure, construction and manufacturing activity, while production grew at a slower pace. Finished steel output increased 7.7% to 13.937 mt and crude steel production rose 2.9% to 14.213 mt, according to the ministry document.
Imports during the first two months of FY27 climbed 45% from a year earlier to 1.368 mt, outpacing the 27.4% increase in exports to 0.977 mt and reinforcing India's status as a net importer of finished steel in the opening months of FY27, the document showed. The ministry of steel did not immediately respond to Mint’s queries.
Private sector drives growth
Private steelmakers continued to dominate the sector's growth, accounting for 85% of India's crude steel production and 88% of finished steel production in May. Private producers manufactured 12.091 mt of crude steel, up 4.9% from a year earlier, while finished steel production rose 10.8% to 12.237 mt. India’s top private steelmakers include JSW Steel, Tata Steel, Jindal Steel, and ArcelorMittal Nippon Steel India.
In contrast, public sector steelmakers saw production decline. Crude steel output from public sector units fell 7.6% year-on-year to 2.123 mt, while finished steel production dropped 10.5% to 1.7 mt. Steel Authority of India, Rashtriya Ispat Nigam, and NMDC Steel are the top public sector steelmakers.
These steelmakers saw lower output as they hadn’t added capacity at the pace of private players, according to BigMint. Planned maintenance shutdowns and raw material constraints at some plants also weighed on production, with some companies choosing to sell semi-finished steel products such as billets. BigMint said volumes could come under further pressure after a fire at Rashtriya Ispat Nigam Limited’s (RINL) Vishakhapatnam Steel Plant on 8 June, in which eight people died and six were injured. RINL is investigating the accident.
The year-on-year production drop for public sector steelmakers was worsened by a high base from last year, when a provisional safeguard duty pushed steel prices up, prompting producers to maximize output and sales. Going forward, BigMint expects demand to soften during the monsoon season, though steelmakers may still push high volumes to protect their profit margins.