Neha Arora
NEW DELHI, Feb 17 (Reuters) – India is looking for new steel export markets in the Middle East and Asia to offset the impact of a European Union carbon tax that comes into effect in January, a government source said.
India is the world’s second-largest crude steel producer and about two-thirds of its steel exports go to Europe, where steel flows are under pressure in the wake of the EU’s carbon border adjustment mechanism.
Last week, Steel Minister Sandeep Poundrik said the government must act to support exports hit by Europe’s carbon tax.
“For exports, we are looking for new markets and we are trying to reach agreements with countries in the Middle East where a lot of infrastructure is being built, as well as with Asian countries,” said a source directly involved in the decision-making, who declined to be named because the deliberations are confidential.
“So far, our exports have been mainly in Europe, but we are working hard to diversify,” the source added.
India’s federal steel ministry did not respond to an email seeking comment.
Mills are seeking government support to help them compete in non-European Union markets dominated by China, an executive at a major steel company said.
China’s steel exports, the world’s largest producer, have remained resilient since 2023 and hit a record monthly high in December. Beijing plans to introduce a licensing system this year to regulate alloy exports as strong export volumes fuel a global protectionist backlash.
Ensure the safety of raw materials
New Delhi is increasingly looking to long-term offtake agreements and asset acquisitions, the sources said, explaining India’s stepped-up efforts to secure supplies of raw materials such as coking coal, limestone, manganese and other critical minerals.
State-run Steel Authority of India (SAIL) and mining company NMDC are eyeing Brazil, Argentina, Australia and the Middle East, sources said.
SAIL and NMDC did not respond to emails seeking comment.
“For coking coal asset acquisitions, we are considering Australia,” the source said.
Currently, about 95% of the industry’s coking coal needs are met through imports, with more than half supplied by Australia.
Last year, NMDC said it was exploring for coking coal assets in Indonesia and Australia.
(Reporting by Neha Arora. Editing by Mayank Bhardwaj and Mark Potter)
