India is the world’s second largest crude steel producer. (file photo)
After the implementation of the European Union (EU) carbon tax, India has started preparations to make a major change in its steel export strategy. Quoting a government source, Reuters reported that India is now looking for new export markets for steel in the Middle East and Asia to reduce the impact of the EU’s carbon tax, which came into effect from January. India is the second largest crude steel producer in the world. India sends about two-thirds of its total steel exports to Europe, but after the implementation of the European Union’s Carbon Border Adjustment Mechanism (CBAM), the pressure on exports there has increased.
Last week, Steel Secretary Sandeep Poundrick had said that the government will have to take steps to support exports affected by Europe’s carbon tax. A source associated with the decision process, on condition of anonymity, said, we are looking for new markets for exports. We are trying to make agreements with the countries of the Middle East, where infrastructure work is going on on a large scale. Besides, opportunities are also being explored in Asia. He said, till now our focus was mostly on Europe, but now we are trying to diversify the markets. However, there has been no reaction from the Union Steel Ministry on this development.
Preparation to compete with China
A senior official of a large steel company said that the companies want support from the government so that they can compete with China in markets outside the European Union, where China dominates. China is the world’s largest steel producer, its exports have remained strong through 2023 and reached a record monthly level in December. Beijing is planning to introduce a licensing system this year to control alloy exports, as excess exports are increasing protectionism around the world.
raw material security
The source said that India is increasing its efforts to strengthen the supply of coking coal, limestone, manganese and other essential minerals. India is now focusing on long-term offtake agreements and acquisition of mines/assets. Government company Steel Authority of India (SAIL) and mining company NMDC are exploring opportunities in Brazil, Argentina, Australia and the Middle East. According to the report, India is eyeing Australia to buy coking coal mines. At present, about 95% of the coking coal requirement of this region is met by imports, of which more than half of the supply comes from Australia. Last year, NMDC had said that it was exploring coking coal properties in Indonesia and Australia.
