After three years, India warming up to Russian steel imports again

India imported the highest quantum of electrical sheets—a kind of speciality steel—from China, followed by Russia, for the six months ended September, steel ministry data shows. India made most of the payment for these imports through the dollar mechanism, but market participants told Mint that some rupee-rouble trade was also taking place.

India bought around 50,300 tonnes of speciality steel, or 40% of its total finished steel imports, from Russia over the six months. Total finished steel imports from Russia were at 127,800 tonnes, making it India’s fourth-largest source of steel imports, as per the ministry data.

In comparison, speciality steel coming in from China totalled 70,900 tonnes out of 755,100 tonnes of finished steel. Other major sellers of speciality steel include Korea and Japan. Major producers of this category of steel in India include JSW Steel, Tata Steel and SAIL.

In FY25, India’s electrical steel imports comprised over 5% of finished steel at around 491,000 tonnes of the total 9.55 million tonnes.

The shift also comes in the backdrop of India deepening trade ties with Russia, most visibly through discounted crude oil purchases. Despite pressure from the US and European Union to curb imports, India has maintained that energy procurement decisions are guided by domestic demand and affordability.

For a comparison, shipments coming into India from Russia between 1 April and 30 September, 2022 totalled 96,300 tonnes, of which only 1,100 tonnes were speciality steel. Russian shipments fell to 26,000 tonnes in the same period the following year but doubled to 61,600 tonnes a year later, driven by demand for electrical steel, the data showed.

Russia emerged as the fourth-largest source of steel imports during April–September, witnessing a 107% increase over the previous 12 months and overtaking countries such as Vietnam, Nepal, Taiwan, and Germany. However, Russian shipments to India were still lower than those of the top three sellers—Korea (up less than 2%), China (down 48%), and Japan (down 45%) during the same period.

The cost factor

Russian steel is entering India at cheaper rates, at least 20% lower than Chinese offerings, where prices are adjusted post-safeguard duty, said two people in the know of the development.

In value terms, imported finished steel from Russia were at $209.6 million for April-September. Prices were down 46.2% from the previous year (April-September 2024), when imports, despite being half the current year’s volumes at 61,600 tonnes, were valued at $389.4 million, ministry data show.

“Barring some ticket players, one of which is a PSU, not much electrical steel demand outstrips supply still. So there is continued reliance on imports. With safeguard duty, Chinese steel is costly and Russian offerings are relatively cheaper with payments being made mostly via the dollar,” said one of the two market participants mentioned above.

Russian steel does not have a safeguard duty levy compared to steel coming in from China or Japan.

A second analyst said that Russian steel could see further price correction, and the possibility of more bookings into India cannot be ruled out, either for end-user industries like automotive or for hot-rolled coils.

In an emailed response to Mint’s queries, market intelligence firm BigMint said Russia emerged as one of India’s leading suppliers of hot-rolled coil (HRC) and specialty steel this year largely driven due to its competitive pricing that is about 3% lower than Chinese offerings. Russian HRC export offers were quoted around $465 per tonne, compared with approximately $480 per tonne from China, making them highly attractive to Indian buyers, it said.

“India’s increasing import appetite and subdued domestic prices have created a favorable environment for Russian shipments. With imports from China and other Asian suppliers tapering off, Russia has been able to capture this market gap by offering lower rates and maintaining valid (quality) certifications. Indian buyers are also actively exploring alternative sourcing options,” it said. As per the market intelligence firm, some of the regular buyers of specialty steel include likes of Nlmk India, Uttam Galva Ferous, Hi-Tech Pipes, among others.

The Sberbank branch in India, in a 28 May document on its website, said Russia was resuming steel exports to India after an 18-month break, referencing a BigMint report earlier in the month.