Sajjan Jindal bats for 'longer term solution' for Indian steel sector

Business Standard

19 hours ago

Billionaire industrialist Sajjan Jindal has called for a 'longer-term solution' to ensure the competitiveness of Indian steel in the wake of the uncertainty caused by US tariffs.
In his message to shareholders as mentioned in JSW Steel's latest annual report, Jindal said: 'We are navigating a period of change, shaped by an evolving global political and policy landscape. While India remains on a transformative growth path, driving healthy steel demand, the steel industry faces a challenging environment marked by weak global demand and record Chinese steel exports, even as iron ore costs remain relatively elevated.'
The chairman and managing director of the company pointed out that uncertainty related to tariffs imposed by the US had caused volatility in global markets. 'Trade barriers have been rising, with various countries either imposing measures or initiating action to protect their steel industries from unfair imports.'
'This is altering global trade flows, with surplus steel finding its way into India, posing significant challenges for Indian steelmakers. India has imposed a 12 per cent safeguard duty on certain steel products for 200 days, based on a preliminary investigation undertaken by the Directorate General of Trade Remedies (DGTR),' he said, adding that a longer-term solution was critical to ensure the competitiveness of Indian steel, create a level-playing field, and allow Indian steelmakers to earn a reasonable return on investments.
The comments come at a time when major Indian steel producers are expanding capacity at a frenetic pace. JSW Steel has committed a capital expenditure of Rs 62,000 crore over the next three years to support its goal of achieving 42 million tonnes per annum (mtpa) steelmaking capacity in India by September 2027.
The company's domestic installed capacity is 34.2 mtpa, and plans are afoot to take it to 50 mtpa by FY31.
On 21 April, the Ministry of Finance announced the imposition of a 12 per cent provisional safeguard duty for a period of 200 days on certain steel products to protect the domestic industry from injury caused by a spike in imports.
It came a month after the DGTR, under the Ministry of Commerce and Industry, had recommended a 12 per cent safeguard duty.
However, steel prices have remained soft despite the safeguard duty.
Tata Steel and Tata group chairman Natarajan Chandrasekaran, while responding to shareholder queries on the market environment at the steel major's annual general meeting (AGM) recently, said that China continues to export about 100 million tonnes (mt) of steel.
'That is definitely affecting the overall steel price not only in global markets but also in India. The Indian government has put a safeguard duty of 12 per cent and the industry obviously was wanting almost double that. But we are happy that the government took the step to put the 12 per cent,' he said, adding that in spite of that, steel prices remained soft.
However, he also said that Tata Steel was expected to post better revenues, EBITDA, profits, and cash flow in FY26 compared to FY25 on the back of overall performance, increased capacity, and current spread levels.