Indian steelmakers expect exports to the EU and UK to decline by up to 40% this fiscal year after both markets tightened import regulations.
Cheap Chinese steel imports are complicating that strategy, with Chinese products priced $52–$63 per tonne lower than domestic grades.
Despite export headwinds, leading producers continue to expand capacity, betting on India's robust infrastructure spending and rising steel consumption.
Indian steel producers are increasingly shifting their focus to the domestic market as exports to Europe and the United Kingdom face fresh trade restrictions. However, the strategy is being challenged by a surge in low-priced Chinese steel imports, industry executives and analysts told Reuters.
India, the world's second-largest crude steel producer after China, sends nearly two-thirds of its steel exports to Europe. Industry leaders expect shipments to the European Union and the UK to decline by as much as 40% during the current financial year, forcing manufacturers to look for alternative markets and stronger domestic demand.
4 July 2026
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Europe and UK Tighten Import Rules
The European Union has introduced stricter import measures, including revised duty-free quotas announced on June 30, following the rollout of its Carbon Border Adjustment Mechanism (CBAM) earlier this year. The mechanism imposes carbon-related charges on imported steel and other emissions-intensive products.
The United Kingdom has also tightened tariff-free steel imports from July 1. While the Indian government maintains that around 85% of India's steel exports to the UK remain protected under the India-UK Free Trade Agreement, exporters expect overall shipments to face pressure.
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India exported 6.6 million metric tonnes of finished steel in FY2025-26. Exports slipped to 0.5 million tonnes in May, significantly below the average monthly shipments recorded over the previous six months.
Domestic Demand Offers Growth, But Imports Pose Challenge
Industry executives believe India's strong domestic steel consumption provides an opportunity to offset weaker exports. However, cheaper imports, particularly from China, are squeezing margins.
According to industry estimates cited by Reuters, Chinese steel is priced $52-$63 per tonne lower than comparable domestic products, making it difficult for Indian manufacturers to compete.
"The rise in low-priced and substandard imports, particularly from China or those of Chinese origin, is creating an uneven competitive environment," Jindal Stainless Managing Director Abhyuday Jindal told Reuters.
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The Indian government has already initiated an anti-dumping investigation into hot-rolled steel imports from China, Japan and Russia. A senior government official told Reuters that India remains one of the few major markets where steel demand continues to grow and said additional trade protection measures could be considered if required.
Capacity Expansion Continues
Despite export headwinds, major steelmakers continue to invest aggressively in India, driven by expectations of sustained domestic demand.
India aims to expand its crude steel production capacity to 400 million tonnes by 2035-36, up from the current output of around 168 million tonnes.
Moody's Ratings said companies such as Tata Steel and JSW Steel are prioritising investments in India, viewing it as their primary long-term growth market. However, analysts caution that profitability may remain under pressure unless import duties are increased to curb cheaper overseas supplies.
Industry experts also expect Indian steelmakers to diversify exports toward East Asia and the Middle East, although competition from Chinese producers and regional manufacturers is expected to remain intense, Reuters reported.
