Following U.S. President Trump's decision to impose high trade tariffs on steel imports, the repercussions are being felt in unexpected ways in Bengaluru, India. The 25% tariff on steel imports is expected to lead to the dumping of cheap steel in countries like India, as it becomes too expensive for countries such as China and South Korea to export to the U.S.
While this may benefit small Indian companies like Sun Techpro Engineering, which rely on steel for their products, concerns have been raised by the Indian Steel Association about the potential for steel dumping in India. The increased competition could impact India's efforts to produce steel more sustainably, as the current production methods contribute significantly to greenhouse gas emissions.
India, being one of the world's most populous nations and a rapidly growing economy, has a soaring demand for steel due to urbanization and infrastructure development. The government aims to increase steel production from 120 million tons to 300 million tons in the next five years, which could further escalate greenhouse gas emissions from steelmaking.
Unlike other major steel-producing nations, India still relies heavily on coal-based blast furnaces, which are more carbon-intensive. Efforts to transition to cleaner steelmaking methods have been hindered by the focus on expanding coal-based steel production facilities. This poses challenges for India's future steel exports, especially to regions like Europe that are implementing carbon border taxes.
Despite these challenges, India has ambitious climate goals, including producing 500 gigawatts of clean power and achieving net-zero emissions by 2070. Indian steelmakers acknowledge the need to reduce emissions but express concerns about the financial implications. Finding a balance between economic growth, decarbonization, and sustainability remains a key challenge for the Indian steel industry.
