The Indian government has pledged to take targeted actions to support the country’s steel exporters as they face the impact of the European Union’s carbon border tax and other trade barriers, a senior official said on Monday.
India’s steel industry, which sends roughly two-thirds of its exports to European markets, is expected to suffer a decline in shipments following the EU’s implementation of its Carbon Border Adjustment Mechanism (CBAM). The levy, which came into force in January, imposes charges on imports of carbon-intensive goods such as steel and cement, reflecting their embedded greenhouse gas emissions.
In comments at a government event in New Delhi, Steel Secretary Sandeep Poundrik said New Delhi will respond with supportive measures to help firms cope with the added costs and compliance challenges tied to the EU’s carbon tax, import quotas and tariffs. He noted that while a recent India–EU trade deal reduced tariffs on several products, the carbon border tax remained unchanged, continuing to weigh on exporters.
The government’s planned assistance is expected to focus on helping companies diversify into alternative markets beyond Europe, including Africa and the Middle East. India’s officials have also been engaging with European counterparts and multilateral forums to address concerns about how carbon levies affect competitiveness.
Industry groups say the EU carbon tax could force Indian steel exporters to adjust pricing and supply strategies as the bloc’s rules progressively penalise higher-emission production. Producers are increasingly preparing emission data and exploring cleaner technologies to mitigate long-term costs.