Care Ratings: India must focus on increasing steel consumption, reduce dependence on imports.

MUMBAI: India should focus on increasing consumption of steel and reduce dependence on cheap imports, research agency CARE Ratings said in a report. 

CARE Ratings said while India has gained the position of third largest crude steel producer in the world it must focus at the same time on increasing consumption of steel and reducing the dependency on cheap imports. The steel consumption is required to move in line with that of production, it added. 

JSW SteelBSE 0.76 %, Tata SteelBSE 0.37 % and Essar SteelBSE 0.41 % are India's largest steel makers. These companies expanded capacity in the hope of increase in steel demand as India moves fast on industrial and infrastructure development. However, cheap imports from China hit these companies hard last year before Indian government adopted some protectionist measures. 

"Steel production and consumption is expected to remain higher in 2017-18 backed by an increase in infrastructure allocation by the government in the Union Budget 2017-18 and its aim to increase the country’s steel production as stated in National Steel Policy 2017," the report stated. 

CARE Ratings said the extension of anti-dumping duties by two months will benefit the steel industry. However, it cannot be expected that this protection will last forever and the industry has to gear itself to face competition in the normal course, it added.