NEW DELHI: India's prominent steel manufacturers are recalibrating their market strategies, shifting focus towards the domestic sector to mitigate the impact of declining exports. This strategic pivot comes as major overseas markets, particularly in Europe and Britain, have implemented stricter import protocols, according to insights from industry executives and analysts.
As the world's second-largest crude steel producer, India typically dispatches approximately two-thirds of its finished steel to European nations. However, industry insiders anticipate a substantial reduction, potentially up to 40%, in exports to the European Union and Britain during the current fiscal year. This downturn follows the introduction of new import rules by both regions.
The European Union, on June 30, unveiled quotas designed to limit duty-free steel imports. This move builds on the carbon charges initiated in January on steel and other carbon-intensive goods, part of its Carbon Border Adjustment Mechanism. Similarly, Britain tightened its tariff-free steel import regime starting July 1, although New Delhi affirms that 85% of India's steel exports to the UK remain protected under the existing free trade agreement.
In the fiscal year concluding March 2026, India exported 6.6 million metric tons of finished steel. However, a significant drop was observed in May, with exports falling to 0.5 million tons, considerably below the average of the preceding six months. The reorientation towards the domestic market, while necessary, presents its own set of hurdles, primarily intense competition from more affordably priced Chinese steel, which could undermine the effectiveness of this revised strategy.
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