The country's steel mills have high sales in the region and carbon-intensive production
The European Carbon Border Adjustment Mechanism (CBAM) poses the biggest risks to Indian steel mills due to high sales in the region and increasing emissions intensity at the country's steel mills. This assessment was made by investment bank Goldman Sachs in its report, Bloomberg reports .
Goldman analysts note that, over the next decade, the tax on Indian steel imports into the bloc could vary between $102 and $190 per ton. This range, which assumes a carbon price of US$70 per ton in 2026, is 15% to 28% of current hot-rolled coil prices.
As the report notes, Indian steel producers operate at a level of carbon intensity that is significantly higher than European and global levels and rely heavily on coal-based technologies. This could potentially lead to higher rates. Tata Steel and JSW Steel Ltd are the most directly related to the European region among Indian steelmakers, Goldman emphasizes, noting the risks of lower margins or reduced sales.
The introduction of CBAM has already caused resistance from foreign producers, including China. Indian factories were among those speaking out about the potential impact of the carbon tax, calling it a “trade barrier.” New Delhi is negotiating certain concessions with the EU.
As the GMK Center previously reported, according to analysts at Goldman Sachs, the EU's decision to impose a tax on carbon-intensive imports under the CBAM could seriously affect Chinese steel and aluminum producers. According to Goldman analysts, the tax will reach 6% in 2026 for China and will rise to 21% in 2032.
