The benefit to Indian steel exports to the US after a recent ‘market access' agreement between the countries remains unclear a month on as finer details remain elusive.
On the concluding day of Indian prime minister Narendra Modi's visit to the US on 23 June, the Indian commerce ministry said the US has agreed to grant market access to 70pc of steel products originating in India under the exclusion process of Section 232.
The breakthrough came five years after the additional 25pc duty on steel imports to the US was imposed in a move to safeguard national security.
But the Indian steel industry's reception to the news has been lukewarm, with most participants still awaiting the fine print of the agreement made between the countries. Indian semi-finished and finished steel exports to the US accounted for 2.9pc of total steel exports in the 2022-23 fiscal year and 2pc in 2021-22, and a sudden surge is not expected.
"The safeguard of 25pc which was imposed is prevalent today as well. And there was a discussion that certain lines and certain products, they are looking at exempting so we would look forward to some direction and clarity on this once this is decided between both the countries," said JSW Steel's joint managing director and chief executive Jayant Acharya in a company earnings call on 21 July.
Most participants also pointed out the exorbitant anti-dumping and countervailing duties by the US that are in place on flat steel products originating from India that range from 4pc to over 500pc, making it unviable to export.
The commerce ministry's announcement that six World Trade Organisation cases were mutually resolved between the countries, of which two pertain to certain hot-rolled carbon steel flat products from India and certain measures on steel and aluminum products, has further muddied the waters with some expecting a removal or reduction in other existing duties.
But no further announcements or clarifications have been made by the government.
"This so called 'market access' is more of symbolic value today than anything else," said another producer, adding "and anyway, basic import duty continues. [The US'] local steel manufacturing lobby is very strong, they ensure major industries end up using locally produced steel first before anything else."
Some market participants remained hopeful that exports of semi-finished steel and certain long products to the US could still receive a boost if the 25pc additional duty is removed.
An additional high-priced steel export market for India is a much-needed welcome at a time when European demand is waning and lower premiums in the Vietnamese and Middle Eastern markets make it less lucrative to sell there.
But whether Indian steelmakers will be able to benefit from it continues to remain in question.
