India's Steel Sector: Navigating the EU Trade Deal and Carbon Tax

Business Economy

Posted by AI on 2026-02-09 17:36:14 | Last Updated by AI on 2026-02-09 19:16:43

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In a significant development for India's steel industry, the government has pledged its support to exporters facing challenges due to Europe's carbon border tax. This assurance comes just days after India and the European Union (EU) signed a landmark trade agreement, marking a new era in economic cooperation. While the deal slashes tariffs across various sectors, it leaves the EU's Carbon Border Adjustment Mechanism (CBAM) untouched, potentially impacting India's steel exports.

The CBAM, a controversial policy, aims to prevent 'carbon leakage' by imposing tariffs on imports from countries with less stringent climate policies. For India's steel sector, this could mean higher costs and reduced competitiveness in the EU market. The federal secretary's statement is a response to industry concerns, assuring support to mitigate the tax's impact. This commitment is crucial as India seeks to strengthen its position as a major steel exporter, with the EU being a key market.

"We will provide all possible support to our steel industry to ensure they remain competitive in the global market," said the federal secretary, emphasizing the government's dedication to the sector's growth. This assurance is particularly significant as India aims to increase its steel exports to 20 million tons by 2030. The trade deal, despite its overall positive implications, has raised concerns about the potential barriers the CBAM could create for Indian exporters.

With the government's support, India's steel industry is poised to navigate these challenges, ensuring its global presence and contributing to the nation's economic growth. The coming months will be crucial in implementing strategies to overcome the carbon tax hurdle and solidify India's position in the international steel market.

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