Heavy influx of cheaper Chinese stainless steel imports led to nearly 35% of Gujarat's small and medium stainless steel businesses shutting down between July-September 2023. The President of ISSDA highlighted that many others downsized operations. This surge prompted the Indian industry to appeal for countervailing duties due to strained margins and competitive pressure.
The Indian stainless steel sector, particularly in Gujarat, witnessed a significant blow due to the overwhelming arrival of inexpensive Chinese stainless steel imports. Approximately 30-35% of medium and small stainless steel businesses in Gujarat had to cease operations in the period between July and September 2023. This revelation came from Rajamani Krishnamurti, President of the Indian Stainless Steel Development Association (ISSDA), emphasizing Gujarat's position, housing 80% of the MSMEs in this sector.
Besides closures, several other MSMEs adapted by reducing their capacities to maintain viability in the face of intensified competition. The primary catalyst for this disruption stemmed from the pricing pressure caused by cheaper Chinese stainless steel imports. Last year, the industry petitioned the government to levy countervailing duties (CVD) on Chinese stainless steel products. The imposition of duties was prevalent until their removal in the 2021 union budget, leading most MSMEs to either operate on a smaller scale or transition into trading.
Krishnamurti further elaborated on the impact, stating that out of 80 induction furnace companies in Ahmedabad, 20 have ceased operations. Additionally, over 100 re-rollers—involved in manufacturing various objects such as utensils—have shuttered due to the inundation of lower-priced imports.
The situation emerged following the industry's appeal for countervailing duties owing to the detrimental effects on margins, posing a direct challenge to domestic stainless steel players. With many businesses closing and others scaling down, the industry awaits government measures to address this imbalance and protect domestic manufacturers.
The Indian stainless steel industry, primarily centered in Gujarat, grapples with severe challenges due to a surge in cheap Chinese stainless steel imports. With nearly 35% of MSMEs shutting down and others reducing operations, the industry urges government intervention to rectify the impact of these imports on margins and competitiveness.