Steel World

March 2023

MF has predicted that Indian economy will grow by around 6 % in 2023-24. This beats all the major economies such as the US, China, Japan, Germany etc. If this has to happen, the infrastructure development has to continue which will automatically consume huge volumes of steel. Thus if the Indian economy is to grow decently, the iron & steel sector has to perform well.

Today, exports is one of the key factors in the growth of Indian iron & steel sector and around 30% of India’s steel exports are going in the EU. Recently the EU has proposed ‘Carbon Border Adjustment Mechanism’ (CBAM) a tariff on the import of carbon intensive goods such as steel, aluminium etc. This is likely to impact the India’s steel exports to the Europe. The exporting companies will have to start collecting and reporting the carbon data. The CBAM levy is expected to come in gradually in a phased manner by 2026 and will be linked with EU carbon market prices. This will clearly act as a trade barrier for Indian steel exports to EU in coming years. As per the Indian steel producers, this is not as per the Paris agreement on carbon emission where it was agreed that the developed countries will bear a major share in reduction of carbon footprint. It is also not compliant with WTO guidelines. India has committed itself to become carbon neutral by 2070.

Date : 15,May 2023

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