India’s steel industry will not see much direct impact from US tariffs but will be more affected by the European Union’s (EU) carbon tax, secretary of India’s ministry of steel, Sandeep Poundrik, said in a statement on Wednesday, September 17.
Roughly two-thirds of India's steel exports go to Europe, while exports to the US are negligible, he said.
India has sought an exemption from the EU carbon border adjustment mechanism (CBAM), which could impose a higher tax on imports of high-carbon goods, including steel, aluminium and cement.
"The limits on carbon emissions, which are proposed in CBAM, will definitely impact the exports," Poundrik said.
Indian steel is predominantly produced using blast furnaces, where emissions are high, Poundrik said, adding that further addition of blast furnace capacity is an area of concern.
Poundrik also said that India remains concerned about cheap imports and he expects the government to decide on import tariffs, locally known as safeguard duty, in line with the proposed duty rate.
The CBAM is designed to impose a carbon price on imports from countries with lower environmental regulations, initially covering iron and steel, aluminum, cement, fertilizers, electricity and hydrogen. This is expected to be fully in place in 2026.
According to official data, the domestic steel sector accounts for 12 percent of India's greenhouse gas emissions with an emission intensity of 2.55 mt CO2 per mt of crude steel, higher than the global average of 1.9 mt CO2.
