Ministry of Steel Urges Indian Steel Industry to Diversify Export Markets

Export Challenges and the Shift in Trade Policy

The global trade landscape for steel is undergoing a significant transformation, forcing Indian producers to rethink their long-term strategies. Ashwini Kumar, Economic Advisor at the Ministry of Steel, emphasized that the industry faces increasing pressure from protective measures in major high-value markets, specifically the United States and the European Union.

Addressing the ASSOCHAM India Steel Conclave 2026, Kumar pointed to specific regulatory hurdles that now complicate international trade. While the U.S. continues to utilize Section 232 trade measures, the European Union has implemented the Carbon Border Adjustment Mechanism (CBAM). This policy effectively penalizes steel produced through high-carbon-emission processes, making access to European markets increasingly dependent on the carbon intensity of the manufacturing process rather than price or quality alone.

Ashwini Kumar, Economic Advisor at the Ministry of Steel, stated that the Indian steel industry must accelerate its decarbonization efforts, bolster its technology and research and development capabilities, and diversify its export markets to maintain global competitiveness in a rapidly changing trade environment defined by carbon border measures and tariff actions.

Decarbonization as a Strategic Opportunity

Despite the immediate difficulties posed by the EU’s climate-linked trade barriers, government officials are framing the transition as a necessary evolution for the domestic sector. Because Indian steel currently exhibits high carbon intensity, exports to the EU face a difficult path forward unless production methods are modernized.

Kumar suggested that this challenge should be viewed with a positive lens as an opportunity to upgrade industrial technology and production processes. By investing in cleaner technology and reducing emissions, the government believes the sector can strengthen its long-term global competitiveness and avoid being locked out of essential markets.

Raw Material Security and Supply Chain Risks

Beyond the regulatory landscape, the industry is grappling with persistent supply chain vulnerabilities. Tushar Makkar, Head of Corporate Communications at ArcelorMittal Nippon Steel India (AMNS India), highlighted that raw material security remains a critical strategic concern for domestic producers.

The industry’s heavy reliance on external sources creates exposure to various global risks, including freight volatility and raw-material price fluctuations. According to Makkar, India remains dependent on imports for approximately 85 per cent of its coking coal requirements.

Ensuring predictable, long-term access to resources like iron ore is considered essential for future capacity expansion. As the industry attempts to navigate both the transition to greener production and the volatility of global commodity markets, the collaboration between government policy and private investment remains the primary factor in determining whether the sector will successfully adapt to these shifting international standards.