In the wake of the EU's imminent rollout of the Cross-Border Carbon Adjustment Mechanism (CBAM), a significant challenge to its steel exports, India is intensifying its efforts to explore new markets. Indian steelmakers are closely evaluating potential trade opportunities in Africa, Latin America, and the Middle East to counteract the anticipated effects of the EU’s CBAM, which aims to curb carbon emissions by imposing levies on imports.
According to recent data from Business Today, Indian steel exports are heavily concentrated in flat products, particularly hot-rolled and cold-rolled steel. These exports reach over 100 countries, with five European Union member states—Italy, Belgium, Spain, Greece, and Poland—collectively accounting for a substantial 25 percent of India's steel exports in the fiscal year 2022/2023. The high concentration of exports to these EU countries places Indian steelmakers in a vulnerable position, as the CBAM threatens to disrupt this market if diversification efforts are not swiftly implemented.
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In light of these challenges, India is actively engaging in negotiations with previously untapped markets across Africa, Latin America, and the Middle East.
This strategic shift in focus is aimed at establishing strong trade relations and reducing the over-reliance on EU markets. The Indian government and steel industry representatives are working in tandem to bolster trade ties with these regions and identify promising opportunities for export diversification.
The outcome of these efforts will not only determine the resilience of India's steel sector but also shape its future trajectory in the global market amidst evolving environmental regulations. As Indian steelmakers navigate this pivotal juncture, the exploration of new markets presents both challenges and opportunities, ultimately defining the landscape of international steel trade in the coming years.
