“Indian steel production has gone up by 12.9% y-o-y (year-on-year). So, more steel is being produced, but the demand is also much more,” he said.

“When you look at the numbers, you are producing 128 million tons (mt) of steel and exporting 6-8mt, effectively using 122mt domestically. And coming in from abroad is 5 mt.”

India wants to use more of its steel within the country than exporting it, Scindia said. At the same time, international steel demand remains muted, leading to excess capacity in several countries and attracting imports of the alloy, the minister added.

This comes at a time when domestic players have been lobbying with the government to introduce measures to check alleged dumping of steel in India from markets like China and Vietnam.

“The rise in imports may not be a big concern now, but can become a bigger concern if this continues to grow,” a steel industry executive said on condition of anonymity. “There is a need for a permanent solution to the issue so that there is a mechanism in place to deal with cheaper imports.”

Earlier, the steel ministry was said to be exploring the viability of implementing WTO-compliant policy measures in case it was found that steel is being dumped in India mainly from China and a few other southeast Asian countries.

“Steel industry is very cyclical. It goes through a period of glut, and it goes through a period of very high peak demand,” Scindia further mentioned.

He added: “Countries which used to produce steel to use domestically, their domestic demand has fallen. So, those countries are now induced to export.

“Along with that, world production,especially China’s, had contracted by 4% last year, while this year, it has gone up by just 1%, and other countries also have all contracted. At the same time, Indian demand and production have gone through the roof.”

The Indian steel industry has been experiencing a thrust in demand due to the financial impetus provided by the government to infrastructure.

The construction industry is also among the biggest steel-consuming sectors in the country.

The overall Indian steel industry has experienced a growth of 15% y-o-y in demand during the initial 10 months of 2023.

It registered a growth of about 10% y-o-y in FY23 when consumption touched 120 MT, as per SteelMint, a market intelligence and price reporting firm.

Between April and November this year, India imported 4.3mt of steel as against exports of 4mt, becoming a net importer of the alloy.

Experts have attributed this shift in the trade balance to low international prices in the steel sector and higher domestic prices, which not only made imports viable but also inhibited exports.

In addition to this, China’s domestic demand has remained tardy and, therefore, its steel exports have touched record levels this year.

Experts are of the view that India’s steel trade deficit might only reduce once the Chinese economy starts growing faster and internal demand for steel revives, leading to less exports of the alloy to India and other countries.