After a hiatus of three years, India is showing renewed interest in Russian steel imports, driven by competitive pricing and a shift in global trade dynamics. Western sanctions on Russia have prompted Moscow to redirect its exports towards Asia, and India's growing demand for electrical steel, used in transformers and electric motors, has created a favorable market for Russian steel.
Resurgence of Russian Steel
According to steel ministry data, Russia has re-emerged as one of India's top five steel suppliers. This resurgence comes after a period of decline, with exports plummeting over 60% to 65,237 tonnes in 2023 and virtually no sales recorded last year. However, in June 2025, Russian producers are set to supply 35,000–40,000 tonnes of hot-rolled steel to India. This revival is largely attributed to the competitive pricing of Russian steel, which is offered at 3–5% below its Chinese equivalent. In April-September 2024, Russian steel imports to India jumped by 107% compared to last year. The big reason? Price—Russian steel is about 20% cheaper than Chinese options, making it a go-to pick for Indian buyers. In just six months, India imported over $209 million worth of finished steel from Russia, highlighting how important this partnership has become.
Trade Dynamics and Payment Mechanisms
The majority of payments for these imports are being made through the dollar mechanism, although some market participants have indicated that rupee-rouble trade is also taking place. This diversified payment approach provides flexibility and reduces reliance on a single currency, further facilitating trade between the two nations.
Impact on Domestic Steel Market
The influx of cheaper Russian steel is expected to put pressure on local and international suppliers, potentially lowering costs for Indian industries. However, it also poses challenges for domestic steel producers, who are already grappling with rising imports and falling prices. The Reserve Bank of India (RBI) has noted the rise in steel imports and has called for policy support to improve the competitiveness of domestic steel production.
Broader Economic Implications
The revival of Russian steel imports is occurring against the backdrop of a complex global economic landscape. India's steel imports grew by 22% in 2023-24, with a significant portion coming from South Korea, China, the US, Japan, and the UK. Imports have further increased from China, Japan, South Korea, Indonesia, and Vietnam in 2024-25. This surge in imports, coupled with weak export demand and global oversupply, has led to domestic steel prices hitting a five-year low.
Despite a 15% drop in overall steel imports in the first half of FY26, imports from Russia have surged due to competitive pricing. While imports from China and Japan have decreased, South Korea remains the top steel exporter to India, followed by China.
Government Initiatives and Challenges
The Indian government has implemented safeguard duties and other measures to curb imports and protect the domestic steel industry. However, these measures have not been entirely effective in stemming the flow of imports, and the Ministry of Steel is actively engaging with industry stakeholders to address the challenges. The Ministry of Steel has called for an “open house” meeting on October 27 in New Delhi to discuss steel import issues with industry stakeholders.
Future Outlook
As India's steel consumption continues to grow, the country is expected to remain a net importer of steel. The balance between meeting domestic demand and supporting local producers will require careful policy adjustments and strategic trade relationships. Despite potential short-term disruptions, India's diversified trade portfolio and strong foreign exchange reserves position it to adapt to changing global dynamics. Furthermore, India's expanding steel industry is driving increased demand for metallurgical coal, with Russia poised to become a major supplier in the coming years.
