The move, aimed at tackling overcapacity, sparked positive sentiment among investors in Indian steel companies. While China indicated a commitment to 'promote restructuring of the steel industry through output reduction,' it notably refrained from specifying any concrete reduction targets.

China, the world's largest steel producer and consumer, is facing pressure to address oversupply issues. The restructuring initiative is seen as a potential catalyst for stabilizing global steel prices and improving market conditions for producers outside of China.

Chinese steelmakers have been grappling with generating profits as a prolonged property downturn has hit domestic steel consumption and as the mounting trade frictions against cheap Chinese steel products have cast a shadow on its steel exports outlook this year.

The Indian steel sector is anticipated to benefit from a potential decrease in Chinese steel exports, which could lead to increased demand for domestically produced steel.