EU Carbon Border Tax Could Cut India's Steel Exports by 24%: ICRIER Study on CBAM Impact

A new study by ICRIER warns that the European Union's Carbon Border Adjustment Mechanism (CBAM) could reduce India's steel exports to the EU by up to 24%. The tax, designed to prevent carbon leakage by pricing emissions from imported goods, would directly hit Indian steelmakers who rely on coal-intensive production methods. The study estimates that without significant decarbonization investments, Indian steel exports could lose competitiveness in the EU market. For India, this is a concrete signal that carbon pricing is moving from policy talk to trade reality. The steel sector accounts for a large share of India's industrial emissions and exports. If CBAM is enforced as planned, Indian producers will need to either lower their carbon intensity through green hydrogen, scrap-based electric arc furnaces, or carbon capture, or face shrinking margins and market share. The study adds pressure on India to develop its own domestic carbon market and industrial decarbonization strategy. The ICRIER report is a useful data point for anyone tracking how carbon border taxes reshape global trade flows. It also highlights the gap between India's current industrial emissions profile and the trajectory required to maintain access to climate-conscious export markets.