India to support steel exporters amid CBAM implementation

Steel exports from India will continue to be affected by the European carbon tax (CBAM) and EU import quotas, so the government will take measures to help the sector. This was stated by the Secretary of the Ministry of Steel, Sandeep Paundrik, according to Reuters.

Approximately two-thirds of Indian steel mills’ total exports go to Europe. Steel exports from India to the region are expected to decline due to CBAM, prompting the country’s steelmakers to seek alternative buyers in Africa and the Middle East.

“Given the European CBAM, tariffs, quotas, and other challenges, exports will remain a problem, and we will be forced to take action,” Poundrik said at a government event in New Delhi.

It should be noted that the free trade agreement (FTA) between the EU and India does not provide for any exceptions to the cross-border carbon adjustment mechanism. The regime for this country under CBAM will not be more favorable than for others. However, the agreement contains an entire section devoted to climate change and decarbonization, and the parties will also cooperate on the latter.

Regarding steel, according to the agreements, India will receive a duty-free quota for exports of metal products to the EU of 1.6 million tons, approximately half of its annual supplies to the bloc.

The European Union and India concluded negotiations on a historic and ambitious free trade agreement on January 27. This is expected to double exports of goods from the bloc to India by 2032 by eliminating or reducing tariffs on 96.6% of European supplies to the Indian market. The European Union will eliminate or reduce tariffs on 99.5% of goods imported from India over seven years, according to the country’s Ministry of Commerce and Industry.