Troubles within China are expected to spell disaster for the Indian steel industry as desperate Chinese manufacturers would dump their products more rigorously abroad, having already registered a growth of 232 per cent in their shipments to Indian ports, an ASSOCHAM study has cautioned.

"China has got 400 million tons of surplus capacity against a demand of 741 million tons which is more than 50% of its requirement. Excessive capacity of China is four times the total capacity of India and in 2014, steel exports from China were 93 million tons in total, increasing by 50.5% year-on-year," the ASSOCHAM paper said.

India's steel imports have increased by over 71% in 2014-15 (v/s 2013-14) and trade deficit only in terms of steel has widened by USD 3.66 billion. Specifically, China's steel imports coming into Indian in 2014-15 surged by over 232% and the trade deficit with China alone widened by USD 2.66 billion.

India's imports of defective steel and seconds increased by 30% in 2014 -15. Such imports of HR alone witnessed a sharp rise of 99% along with CR rising by 81%.

Further with further devaluation in Yuan, the impact is being felt on Australian, Taiwanese and Japanese currencies as well. This would make Chinese exports cheaper creating more room for their surplus steel in growing markets like India, it said.

Moreover, defective and second steel is being dumped into India to the detriment of our construction and health of people.

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