India’s government was confident that strong domestic demand for steel would offset the European Union’s plans to tighten steel import quotas from April, a source with direct knowledge of the matter said.
On Tuesday, the European Commission said it would tighten import restrictions on steel from next month in a bid to shield the ailing European steel sector from surging imports.
The EU will reduce import quotas, known as safeguards, limiting the amount of steel that can be imported into the bloc of 27 nations tariff-free.
“There will be some impact but our domestic consumption is growing so fast that the industry should be able to absorb,” the source said, declining to be identified as India has not yet publically responded to the EU’s move.
Among the EU’s concerns were India’s exports, as Europe is among the top destinations for Indian steel.
In the first 11 months of the financial year, India exported 2.03 million metric tonnes of steel to the European Union, which was 46 per cent of the country’s overall shipments.
However, Indian exports are typically small compared to local consumption inside the world’s second-biggest crude steel-producing nation.
In 2023/24, India exported 7.5 million metric tonnes of steel, while consumption was 136 million metric tonnes.
The source also said there would be no impact from US tariffs on Indian steel, as exports to the US were “insignificant.”
The source added that since Chinese exports to the US were small, there was less concern about diverted steel flows toward India, adding that China still remained the “biggest concern”.
India shipped record quantities of steel from China, South Korea and Japan in the first 10 months of the financial year that started in April. The country also remained a net importer.
Last week, India recommended a temporary tax of 12 per cent on some steel products for 200 days, known locally as safeguard duty, in a bid to curb imports.
