Why India's exports of finished steel have plunged this fiscal year

In what is being seen as a fallout of an export tax imposed by the government, India's exports of finished steel more than halved during the first nine months of the fiscal year that began in April 2022, according to the latest government data reported by Reuters. 

The exports fell 54.1% to 4.74 million tonnes between April and December, as consumption dropped in major global markets, and mills struggled to revive shipments after the recent withdrawal of an export tax.

Why is this significant from India’s standpoint?

India is the world’s second largest producer of crude steel, so this could have a significant impact on the steel industry.

Why did the Indian government impose the export tax?

In May, New Delhi raised export tax by 15% on eight steel intermediates, hitting major steelmakers, who had hoped to boost global market share after Russia's invasion of Ukraine, but the higher duties made shipments unattractive.

But weren’t the duties scrapped?

The duties were scrapped in November, but mills have since complained about difficulties in recovering share in traditional markets, including Europe.

How has finished steel production in India looked like over the recent past?

India's finished steel output increased 5.7% to 87.9 million tonnes and consumption went up by 11.5% to 85.5 million tonnes between April and December.

India imported 4.4 million tonnes of finished steel during the period, up 27.4% from a year earlier. Crude steel production was up 5%, at 92.5 million tonnes.