India backs steel sector as EU carbon border tax pressures exports, trade strategy

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🗞️ Driving the news: India is preparing to support its steel sector as the European Union's Carbon Border Adjustment Mechanism (CBAM) increasingly impacts exports
• The EU's carbon pricing system applies fees on emissions-intensive goods, such as steel, placing Indian exporters at a disadvantage, as European demand constitutes about two-thirds of their steel exports

🔭 The context: Since its introduction in 2021, the EU's CBAM targets industries with high emissions, such as steel and cement, by imposing costs on carbon embedded in imported goods
• India, a major steel exporter, has criticized the mechanism, arguing it discriminates against developing nations and risks distorting global trade
• As a result, Indian steelmakers are shifting focus toward markets in Africa and the Middle East, where carbon border measures are less developed

🌍 Why it matters for the planet: The EU’s carbon border policies are reshaping global trade flows, particularly in carbon-intensive industries like steel
• The increasing integration of carbon pricing into trade regulations could drive global shifts in industrial practices and investment strategies

⏭️ What's next: As India adjusts its trade strategy, the country’s government may introduce measures to support domestic steel producers, such as incentives for cleaner production or trade diplomacy to negotiate exemptions

💬 One quote: “With the EU’s CBAM and tariffs, quotas, and other challenges, exports will remain a problem, and we will have to take action,” said Sandeep Poundrik, India’s federal steel secretary

📈 One stat: India sends roughly two-thirds of its steel exports to Europe, which is now subject to EU carbon pricing regulations

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