Signs of Thawing India-China Relations

By Neha Arora

NEW DELHI (Reuters) – Signs of thawing ties a day after the leaders of India and China met are unlikely to deter New Delhi's plans to back tariffs on steel as they are not country-specific, a senior government official said.

Mills in the world's second-biggest crude steel producer have been battling an influx of cheap imports, particularly from China, which reached a seven-year high between April and August.

China's surging steel exports have drawn complaints from various countries; some, like Turkey and Indonesia, have imposed anti-dumping duties, asserting that cheap Chinese steel damages domestic manufacturers.

Last week, it was reported that India's steel ministry was supporting a temporary tariff or "safeguard duty", a broad measure affecting countries with which India has free trade agreements.

However, following Prime Minister Narendra Modi and Chinese President Xi Jinping's first formal talks in five years at a BRICS summit, the thaw had not altered the tariff plan.

"If it is put up, it will be against everybody, all countries," said a source on condition of anonymity. "Safeguard is not directed against any particular country."

A decision on implementing the tariff could take up to six months.

Spokespeople for India's steel and finance ministries didn't immediately respond to Reuters' request for comments.

With rapid economic growth and increased infrastructure spending, India has emerged as a global hotspot for steel demand, in stark contrast to subdued markets in Europe and the U.S.

Since last financial year, New Delhi has been a net importer of steel. India’s major steel producers, including JSW Steel, Tata Steel, and ArcelorMittal Nippon Steel India, have expressed concerns regarding cheaper imports from China.

On Wednesday, the two largest countries, both nuclear powers, agreed to enhance communication and cooperation to repair ties that were strained after a military clash on their Himalayan border in 2020, which resulted in the deaths of 20 Indian and four Chinese troops.