Indian steelmakers are returning to the domestic market amid European measures

The country’s leading companies continue to expand their production capacity

Indian steel companies are shifting their focus to the domestic market to offset the fall in exports against the backdrop of steel protectionist measures imposed by the EU and the UK, according to Reuters.

However, company executives and analysts say the task is made more difficult by competition from cheap Chinese steel, which is priced at $52–63 per tonne below local prices.

India exports around two-thirds of its output to Europe. Company executives estimate that, following the tightening of protective measures by the EU and the UK, steel exports to these two markets will fall by 40 per cent in the 2026/2027 financial year.

Abhyuday Jindal, managing director of Jindal Stainless, told the agency that as the UK, the EU, the US and several other markets tighten import quotas and introduce tariffs and protective measures, companies will have to focus more on markets where there is greater long-term visibility on demand.

Meanwhile, a senior government official stated that India is the only major market where steel consumption remains high. The official added that mills may request the introduction of anti-dumping measures to curb cheap imports, particularly from China.

However, leading Indian steel producers continue to expand their production capacity against the backdrop of the country’s economic growth and government investment in infrastructure. India aims to increase its steel production capacity to 400 million tonnes by 2035–2026, up from the current level of around 168 million tonnes.

Most of the new steel capacity being added in the country is based on expectations of domestic demand, noted Ravi Soda, executive vice-president of Elara Capital in Mumbai.

Shankhadip Mukherjee, chief analyst at the London-based CRU Group, says that Indian steelmakers are also expected to target markets in East Asia and the Middle East to partially offset the decline in supplies to Europe. However, in the Middle East, they face growing competition from Chinese and local producers.

It should be noted that the Comprehensive Economic and Trade Agreement (CETA) between India and the UK, which came into force on 15 July, will provide Indian steel exporters with duty-free access for volumes exceeding 1.1 million tonnes annually.

The new arrangement significantly increases the country’s individual quotas for key steel products and provides exclusive limits under the UK’s Authorised Use Scheme (AUS). This will help to offset the negative effects of the UK’s trade defence measures.