While Indian steel exports will continue to be impacted by the European Union’s carbon border adjustment mechanism (CBAM), the Indian government will take steps to help steel companies to maintain overseas shipments to the region, steel ministry secretary Sandeep Poundrik said in a statement on Wednesday, February 11.
Mr. Poundrik made the statement against the backdrop of India and the EU signing a free trade agreement (FTA), slashing tariffs across sectors, but without touching tariffs under CBAM. The EU accounts for about 75 percent of total Indian steel exports to Europe.
“With CBAM and tariff quotas and other challenges, exports will remain a problem and we will have to take action,” Poundrik said.
He, however, did not elaborate on the contours of the proposed government action. But sources in government said that various options are under consideration and that meetings have already been held between representatives from the ministry of steel and their counterparts in the ministry of commerce, which led the talks on the India-EU FTA and finalized various provisions under it.
It was pointed out that one of the options is to frame an incentive scheme for steel exports to offset the impact of CBAM, but this has to be calibrated so that it does not breach anti-subsidy provisions under the WTO.