Trade Tensions a Threat for Domestic Ferro Alloys Sector: IFAPA

Growing trade tensions at global level pose a major threat for the domestic ferro alloys sector, which has raised production capacity over the years, apex industry body IFAPA said urging the government for its intervention.

Ferro alloys like silico manganese and ferro chrome, etc, are used by steel makers as deoxidisers and alloying agents, to improve properties like hardness, strength, corrosion resistance, and wear resistance of the commodity.

"The domestic ferro alloys industry has raised its productive capacity as well as export potential significantly over the years. However, weakening steel production globally, trade barriers and safeguards and upcoming carbon border taxes pose a major threat to exports, especially for India," Manish Sarda, Chairman, Indian Ferro Alloy Producers' Association (IFAPA) told PTI.

India is the world's top exporter of manganese alloys and the third-largest supplier of ferro chrome, he said, adding that this threat or challenge, call it what you will, needs to be tackled in two key ways.

India has almost doubled its ferro alloys manufacturing capacity in the last five years to 8 million tonnes as of March 31, 2025, from 4.3 million tonnes in FY20, as per BigMint data.

The consumption is around 3.4 million tonnes against 2.8 million tonnes in FY20.

The projected growth in crude steelmaking capacity to 300 million tonnes by 2030 and close to 500 million tonnes by 2047-2050 is expected to trigger a surge in demand for steelmaking raw materials.

A major share of the capacity expansion will be based on BF-BOF (blast furnace-basic oxygen furnace) production technology, which will necessitate the continued use of ferro alloys. Moreover, the requirement of value-added, special steels for diverse applications is expected to multiply in the years to come, triggering demand for ferro alloys.

He further said looking at the growth prospectus of the local industry, the threats facing the sector must be tackled.

"This threat... needs to be tackled in two key ways. First, through direct government intervention, free trade agreements with key partners such as the EU, and seeking legal remedies to high tariffs and their adverse impacts on trade and industry.

"Secondly, through enhancing competitiveness by means of rationalisation of electricity charges, ensuring long-term availability of critical raw materials and, of course, gradually transitioning to low-carbon production processes and adopting sustainability measures in industry."