India’s Steel Exports Face EU Carbon Tax Hit

India's steel industry will not be significantly affected by US tariffs, but the European Union’s carbon tax will impact exports, Steel Secretary Sandeep Poundrik said at the FT Live Energy Transition Summit India, Neha Arora reported for Reuters.

The EU’s Carbon Border Adjustment Mechanism (CBAM) could impose higher taxes on imports of high-carbon goods, including steel, aluminum, and cement. (Photo: Tata Steel Facebook) 

Roughly two-thirds of India’s steel exports go to Europe, while exports to the US are negligible.

India has sought an exemption from the EU’s Carbon Border Adjustment Mechanism (CBAM), which could impose higher taxes on imports of high-carbon goods, including steel, aluminum, and cement, Reuters reported.

“The limits of carbon emissions proposed in CBAM will definitely impact exports,” Poundrik said. Indian steel is predominantly produced using blast furnaces, which generate high emissions, he noted, adding that further expansion of blast furnace capacity remains an area of concern.

Poundrik also said India is worried about cheap imports and expects the government to decide on import tariffs—locally known as safeguard duties—in line with the proposed duty rate.