India's Vanadium Pentoxide Imports from China Surge Amid Policy Shift

Vanadium

Removal of Indian Import Duty Boosts V2O5 Flake Trade, Reshaping Global Vanadium Supply Chain

India's demand for vanadium pentoxide flake (V2O5) from China is expected to keep growing in 2025, fueled by a strategic shift in trade policy and booming domestic steel production. The lifting of India’s 5% import duty on V2O5 in July 2024 significantly boosted Chinese exports, with volumes hitting 5,659 tonnes that year — a 2% increase from 2023, largely attributed to India’s buying spree.

December’s V2O5 exports from China to India spiked fourfold year-over-year to 462 tonnes, showcasing India's aggressive restocking. Although this was down 30% from November's peak of 663 tonnes, the trend clearly favors continued growth into 2025.

India Shifts Focus from Ferro-Vanadium to Flake Feedstock

India’s Bureau of Indian Standards (BIS) certification requirement for foreign ferro-vanadium suppliers, introduced in September 2024, has added barriers to ferro-alloy imports. Many Chinese producers resist applying for BIS due to the intrusive approval process, which includes third-party inspections and disclosure of proprietary production data. As a result, Indian buyers have increasingly turned to V2O5 flake as a substitute for direct alloy imports.

India’s strategic move aims to strengthen its domestic ferro-vanadium industry by incentivizing the use of vanadium pentoxide feedstock. While ferro-vanadium imports still incur a 5% duty, V2O5 imports are now duty-free, giving Indian alloy producers a significant cost advantage. This policy shift aligns with India’s growing steel output — up 6.3% year-on-year to 149.6 million tonnes in 2024 — which naturally lifts vanadium demand.

Global Trade Dynamics Rebalance as India Rises

China, the world’s largest vanadium producer with 70% of global output, saw its V2O5 production rise 3.3% to 165,000 tonnes in 2024. As traditional buyers like South Korea, Japan, and Germany scaled back imports due to sluggish steel demand, India stepped in as a key growth market. Indian imports of Chinese V2O5 soared to 470 tonnes in 2024 from zero the previous year — a monumental shift.

Even as ferro-vanadium exports from China to India jumped to 200 tonnes in 2024 — 33 times more than in 2023 — the rising preference for vanadium flake suggests a long-term structural pivot. With India’s BIS certification deadline looming in March 2025, foreign ferro-vanadium suppliers without certification will be locked out, reinforcing India’s reliance on Chinese V2O5 flake.

Looking ahead, India’s rising crude steel output and policy-driven demand for vanadium flake are poised to reshape vanadium trade flows. As China ramps up its production capacity, both nations may find themselves increasingly entwined in the evolving global vanadium market.