Recently, India has been rumored to impose tariffs on Chinese steel products, where does this start? Why would they do this? Could it be that Chinese steel is dumping on India?
What is it that has not yet begun, but it has first sparked a fierce struggle within India?
India is a strange country, many people say that they are the only country in the world that straddles Eastern and Western civilizations. This is really very reasonable, because there are many things that India learns from us and the West.
For example, some people in India have recently clamored for tariffs on Chinese steel, which is obviously affected by the frequent tariffs imposed by the United States and the West on Chinese goods in the past two years.
In the past two years, it has been Indian steel producers who have been clamoring for tariffs on Chinese steel.
It's clear that India, like China, is a big consumer of steel, and they're also stepping up their efforts to develop manufacturing.
However, although India ranks second in the world in steel production, there is a big gap between India and China.
In 2023, India's crude steel output will be 140 million tons, while China's will be 1.02 billion tons, which is a seven-fold capacity gap.
In addition, China's crude steel production accounts for 54% of the world's total output, which can be said to be a crushing existence.
So, India's steel is not enough, and China's steel is in surplus.
At the same time, the quality of Indian steel is not as good as China's, but the cost and price of production are higher than China's.
So, it's only natural that India imports steel from China.
Here's another important statistic, in the 2023/24 financial year ending in March this year, India has become a net importer of finished steel, while China is India's largest steel exporter, with shipments reaching 2.7 million tonnes, almost doubling the previous year.
At the same time, China imports a large amount of iron ore from India. From January to November 2023, China imported a total of 32.85 million tons of iron ore from India, making India one of the main countries increasing China's iron ore imports in 2023.
So, on the one hand, we import a lot of iron ore from India, and on the other hand, India imports finished steel from us, and when these two ends are squeezed, of course, Indian steel producers can't stand it.
This has hurt the interests of Indian steel producers, who are also very worried about not being able to beat China, and they will lose their competitiveness in the next few years when a large amount of Chinese steel enters the Indian market.
Therefore, they have been shouting that India is going to impose tariffs on Chinese steel imports.
On June 29, Reuters, citing an Indian government source, reported that New Delhi is closely monitoring China's steel exports to India because China has been the largest source of steel imports for India in recent months.
The report also highlighted that negotiations are underway within the Indian government to increase the amount of steel imported from China.
This is a little strange, what is the internal negotiation in India?
This shows that India's internal opinions are not unified, and they must first negotiate clearly and unify their thinking on whether to increase imports of Chinese steel and whether to increase tariffs.
Why is this so? It is clear that it looks like the volume of steel imports from China in India is indeed growing very fast.
However, India imported only 2.7 million tonnes of steel from China in the 2023/24 fiscal year, which is less than a fraction of India's annual crude steel output of 140 million tonnes.
To put it bluntly, this is the protectionist thinking of Indian steel producers, who are not afraid of the current threat, but afraid that they will not be able to beat Chinese steel in the future.
However, India's manufacturing industry is growing rapidly, and the demand for steel is also growing rapidly, and it is obviously contradictory that if Indian steel producers are protected by trade, or even handed over to them all the market, it is likely to hurt India's manufacturing industry.
I remember some time ago, when the United States imposed tariffs on Chinese goods, an economist said that it was very stupid for the United States to impose tariffs on the list of goods including some raw materials, because in fact it increased the cost of American manufacturing.
If India imposes tariffs on Chinese steel, the effect will be the same, not only will it damage the interests of India's manufacturing industry on a large scale, but it will also eventually pass on the cost to Indian consumers.
So India is also very contradictory at the moment, and it is very difficult to implement, which is why they have to negotiate internally first.
A Reuters report on the 29th also pointed out that the Indian Ministry of Steel had previously rejected the call for tariffs on the grounds of strong domestic demand.
The US media have reported this incident extensively, but they are actually fanning the flames, and they are desperately encouraging the Indian government to raise the weapon of tariffs in the fear that there will be no chaos in the world.
Of course, we also very much do not want to see India raise tariffs, and based on India's internal entanglements, it is expected that this matter will not be able to come to fruition in the short term.