India’s finished-steel trade balance neared equilibrium in FY26

India’s finished-steel trade balance neared equilibrium in provisional FY26 after a deficit of about 4.7 million tonnes (MT) in FY25. Finished-steel imports declined 32% year on year to 6.5 MT, while exports recovered to 6.6 MT from 4.9 MT, with safeguard measures and tighter quality controls cited as supports.

What changed in India’s finished-steel trade balance in FY26?

India’s finished-steel trade balance moved from a deficit of about 4.7 MT in FY25 to an estimated 0.1 MT surplus in FY26. Imports fell by 3.1 MT, from 9.6 MT to 6.5 MT, while exports increased by 1.7 MT, from 4.9 MT to 6.6 MT. The FY26 export and import figures are provisional.

The FY25 deficit represented a deterioration from FY24, when finished-steel exports were 7.5 MT and imports were 8.3 MT, producing a deficit of about 0.8 MT. During FY25, exports dropped by 2.6 MT and imports rose by 1.3 MT. The source identifies competitively priced imports, particularly from Asian producers, and weaker export opportunities for domestic mills as causes of that net-importer position.

The near-equilibrium FY26 result remains below the export surpluses recorded earlier in the period. India exported 10.8 MT and imported 4.8 MT in FY21, then exported 13.5 MT and imported 4.7 MT in FY22. By FY23, exports had reduced to 6.7 MT and imports had risen to 6.0 MT, illustrating the change in finished-steel trade flows across six fiscals.

How did safeguard measures and quality controls affect imports?

Safeguard measures and stricter quality-control regulations coincided with the 32% fall in finished-steel imports in FY26. The source attributes lower imports to those measures and to the Bureau of Indian Standards (BIS) licensing regime for steel intermediates, which reduced the inflow of low-cost imports.

A safeguard duty is a trade-protection measure intended to address an import surge affecting domestic industry. The source states that the safeguard duty was imposed for three years and expects imports to decline further from the FY26 base. That expectation depends on the duty remaining in force and on the quality-control framework continuing to apply to the relevant steel products.

India had recorded double-digit import growth for three consecutive years before the FY26 decline. The source says competitive imports softened domestic steel prices despite imports accounting for a significantly low quantity relative to total domestic consumption. The FY26 reduction therefore establishes lower import volumes, rather than a stated outcome for domestic prices or demand.

The FY26 trade balance also depended on export recovery, not solely on import restraint. The 3.1 MT decline in imports was larger than the 1.7 MT increase in exports, making import moderation the larger numerical driver of the 4.8 MT improvement in the balance from FY25.

Which countries and products still shape finished-steel trade?

Asian suppliers continued to make up most of India’s finished-steel import basket in FY26. South Korea accounted for 35% of imports, followed by China at 24%, Taiwan at 20%, Japan at 13%, Vietnam at 4% and other origins at 4%, according to the source’s FY26 distribution.

The product mix indicates why certain finished-steel imports continue despite domestic capacity additions. Hot-rolled (HR) coils and strips represented about 28% of FY26 imports, while alloy and stainless steel made up about 29%. Galvanised plain and galvanised corrugated (GP/GC) products accounted for about 15%, plates for 9%, electrical sheets for 8%, cold-rolled coils and sheets for 3%, and pipes, bars, rods and other categories for the remaining 8%.

The source states that domestic mills mainly serve Indian demand but that some grades still need to be imported. It expects reliance on specialty-steel imports to decline gradually as mills add capacity during the current decade and receive support from the Production Linked Incentive (PLI) scheme for steel. That outcome requires domestic production to meet the required specialty grades and quality consistency.

Export access faces a different constraint: wider trade protectionism. The Organisation for Economic Co-operation and Development recorded more than 80 anti-dumping investigations into steel products, a five-fold increase from the previous year, and one-third were directed at China. The European Union reduced steel import quotas by 47% from 2024 levels to 18.3 MT a year, with a 50% customs duty on imports that exceed quota limits.

What could move India’s finished-steel trade balance next?

India’s finished-steel trade balance could return to deficit if imports rise faster than exports, particularly while Chinese surplus steel remains available in global markets. Chinese steel exports increased 7.2% year on year in 2025 and again exceeded 100 MT, as weak domestic demand in China encouraged exports of surplus production.

The source estimates India’s finished-steel exports at 5.5 MT to 7.5 MT in FY27, reflecting the effect of European Union quota changes and broader trade restrictions. The lower end of that range would be 1.1 MT below provisional FY26 exports of 6.6 MT, while the upper end would be 0.9 MT above them. The source provides no FY27 finished-steel import forecast.

Imports are expected to decline further because of the three-year safeguard duty, but the trade result will also depend on overseas market access and global price competition. Italy, Belgium, Vietnam and the United Arab Emirates remain among the key export destinations identified by the source, while South Korea, China and Japan continue to dominate India’s import basket.

Domestic demand can influence export availability because most steel produced in India is consumed locally. Long-steel apparent consumption is estimated at 88 MT in FY26, up from 81 MT in FY25, and is projected at 91 MT to 93 MT in FY27. The source identifies infrastructure projects and rural housing as expected drivers of long-steel demand.

Conclusion

India’s finished-steel trade balance neared equilibrium in provisional FY26 because imports declined to 6.5 MT and exports rose to 6.6 MT. The combination reversed the FY25 deficit of about 4.7 MT, with safeguard measures and the BIS licensing regime identified as factors that reduced low-cost import inflows.

The next measure is whether the three-year safeguard duty continues to curb imports while exports remain within the disclosed FY27 range of 5.5 MT to 7.5 MT. European Union quota reductions, wider anti-dumping action and Chinese exports above 100 MT in 2025 remain unresolved factors affecting India’s finished-steel trade flows.