India will support steel exports hit by Europe’s carbon tax, federal secretary says

By Neha Arora

NEW DELHI, Feb 9 (Reuters) – India’s steel exports will continue to be affected by the European Union’s carbon tax and import quotas and the government will take steps to help the sector, the federal steel secretary said on Monday.

The comments came just days after India and the European Union signed a trade deal that lowered tariffs on several sectors but left intact the bloc’s carbon border tariff, called the Carbon Border Adjustment Mechanism. Indian steelmakers send nearly two-thirds of their total exports to Europe.

“Exports will continue to be a problem because of the European Union’s CBAM and its tariffs, quotas and other challenges, and we will have to take action,” Steel Minister Sandeep Poundrik said at a government event in New Delhi.

India has harshly criticized the world’s first CBAM policy since it was announced by the EU in 2021, saying the tax could hamper steel trade. Since January, the regulatory framework introduced by the EU has led to charges being imposed on imports of steel, cement and other goods whose production results in high levels of carbon emissions.

India’s steel exports to Europe are expected to fall as a result, pushing mills to seek alternative buyers in Africa and the Middle East, Reuters reported.

(Reporting by Neha ‌Arora in New Delhi, Writing by Hritam ‌Mukherjee; Editing by Rashmi Aich)