India’s steel sector, responsible for 12% of the nation’s global emissions, faces significant challenges in its journey toward decarbonization, according to Neha Verma, Director at the Ministry of Steel. Verma revealed that India emits 2.54 tons of CO2 per ton of crude steel, exceeding the global average of 1.91 tons.

Despite being a key industry heavily reliant on coal, steel production is poised for rapid growth, with output expected to rise from 170 million tons to 300 million tons by 2030. Verma emphasized that the expansion will be pursued sustainably, guided by the Ministry’s roadmap to reduce emission intensity to 2.2 tons of CO2 per ton of steel by 2030.

In the short term, energy efficiency improvements and greater reliance on renewable energy could reduce emissions by up to 12%. Long-term solutions, including green hydrogen and carbon capture, offer transformative potential, but challenges such as high costs and technology adoption remain hurdles for the sector.

The Indian government is preparing to tighten quality control measures on steel imports following a rise in low-quality steel dumping, particularly from China, according to officials familiar with the matter. This development follows a recent review by the steel ministry, which highlighted increasing risks from global trade diversions impacting the domestic steel sector.

India became a net importer of steel during the first five months of the current fiscal year, importing 3.45 million tonnes (mt) compared to exports of 1.92 mt. With sluggish demand and high import duties in markets like the US and the EU, international producers have increasingly targeted India as a dumping ground for cheap steel.

Currently, steel imports are allowed through a no-objection certificate (NOC) from the steel ministry, even for multiple grades subject to quality control orders (QCOs). However, the ministry now plans to limit NOCs to only those grades that are unavailable locally. Officials confirmed that of the 1,279 steel grades covered under 151 QCOs, 1,127 were permitted through NOCs. “This loophole will soon be addressed by expanding the scope of QCOs,” said an official.

India imports approximately 400,000 tonnes of non-Bureau of Indian Standards (BIS) compliant steel annually, valued at around Rs 42 billion. To combat this, the government mandated in October 2023 that imports lacking BIS certification must first secure approval from the steel ministry.

In response to rising imports from China and Southeast Asia, the steel ministry has engaged stakeholders for further consultations. Globally, several countries—including the US, Canada, and the European Union—have implemented 25% safeguard duties on steel to protect their industries, while nations like Turkiye, Indonesia, and Japan have taken similar protective actions.

Additionally, India launched an anti-dumping investigation into cold-rolled non-oriented electrical steel imports from China in late September, following complaints by South Korean and Taiwanese manufacturers with operations in India.

The Chairman of Steel Authority of India Limited (SAIL) has called for the imposition of tariffs on steel imports, citing the need to protect the domestic steel industry from rising competition and price pressures. This recommendation comes amid growing concerns over the impact of cheaper imported steel, particularly from China, which is affecting the profitability and stability of Indian steel producers. The chairman highlighted that the influx of foreign steel has created market imbalances, making it difficult for local manufacturers to compete on both price and volume.

India’s steel industry, one of the largest in the world, has been facing challenges from an oversupply of cheaper steel imports, which has put downward pressure on prices. By imposing tariffs, the Indian government could level the playing field for domestic producers, allowing them to compete more effectively and maintain their market share. The SAIL chairman emphasized that protective measures would support the industry’s long-term growth and help safeguard jobs in the steel sector.

Steel tariffs are seen as essential for ensuring that the Indian steel industry can withstand the growing competition from global players, particularly from countries with lower production costs. The chairman’s call aligns with similar demands from other industry stakeholders who have expressed concerns about the current pricing environment and the potential impact on domestic production.

The proposal for tariffs is aimed at fostering a more sustainable domestic steel market, providing Indian producers with the protection they need to continue investing in capacity and technology. With steel being a critical component of India’s infrastructure and construction sectors, the industry’s stability is vital for the country’s overall economic growth.