In order to boost the infrastructure development in the country, the government relaxed the norms for import of steel and its products. The Directorate General of Foreign Trade (DGFT) has notified that an exporter needs to provide quality certification from any international standard certifying body.
India mainly imports flat steel products which find application in the automotive and fast-moving consumer durable sectors. China, Japan, South Korea, the US and Europe are the major suppliers to India. Over the past few years, domestic steel industry has been struggling with increased input cost, leading to decline in steel production. Further, low iron ore production, a main raw material for steel production, mainly in Karnataka has not only hampered the capacity utilization of various steel players, but also led to significant rise in the cost of iron ore in the domestic market due to limited supplies. Since 2007-08, India has been a net importer of steel.
The demand of finished steel is a key indicator of the health of an economy. However, the domestic demand also remained subdued owing to the prevailing economic slowdown. Indian economic growth has slowed down to around 4.6% during first nine month of current fiscal. Import of total finished steel declined by 28.3 percent y-o-y in April-November at 3.65 MT. In the last fiscal, India imported only 7.9 million tonnes (MT) steel. Meanwhile, it is expected that country's steel imports may increase to 50 MT to meet the anticipated 200 MT demand by 2020.
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