India to Shield Steel Exports from EU Carbon Tax Impact

As per Reuters, India’s steel exports are expected to remain under pressure due to the European Union’s carbon border tax framework and import quota restrictions, with the Centre preparing measures to support affected producers, according to the steel secretary. 

Export Pressure from EU Carbon Rules 

Speaking at a government event in New Delhi on February 9, 2026, Steel Secretary Sandeep Poundrik said Indian steel shipments will continue to face challenges in the European market despite the recent India-EU trade deal covering tariff reductions in several sectors.  

The EU’s carbon-linked border levy structure remains unchanged and continues to apply to emission-intensive products such as steel. “With European Union’s CBAM and tariffs, quotas and other challenges, exports will remain a problem and we will have to take action,” Poundrik said. 

Carbon Border Tax Impact On Trade Flows 

The European Union’s Carbon Border Adjustment Mechanism (CBAM), first introduced in 2021 and now operational in regulatory form, imposes carbon-based charges on imports of high-emission goods including steel and cement.  

Indian producers have repeatedly raised concerns that the mechanism raises landed costs and weakens competitiveness in Europe, which accounts for roughly two-thirds of India’s steel export volumes. 

As reported by Reuters, Industry participants are increasingly exploring alternative export destinations, including markets in Africa and the Middle East, as European compliance costs and quota limits tighten. 

Read More: Maharashtra Govt Inks ₹48,000 Crore MoUs with Auto and Steel Firms! 

Conclusion 

With EU carbon rules and quota limits continuing to weigh on shipments, the government has indicated policy support for exporters as the steel sector adjusts its market strategy. 

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