In Bengaluru, India, small factories are bustling with activity, producing various steel products from car parts to kitchen sinks. Recently, President Trump announced new high trade tariffs on steel imports, which has surprisingly garnered support from some workers in the industry.
Many in the steel sector worry that these tariffs will lead to an influx of cheap steel from countries like China and South Korea, as the 25% tariffs may price them out of the U.S. market. This could result in cheaper steel sold in India, potentially benefiting local companies.
For B. Praveen, who runs a steel business, this could mean better profit margins as the cost of steel drops. His company, like many others, plays a crucial role in supporting India’s economy by employing over 200 million people.
However, this influx of cheaper steel may not be beneficial for everyone. Naveen Jindal, president of the Indian Steel Association, has expressed deep concern. With India being one of the few major markets without trade restrictions, it’s vulnerable to a surge in steel dumping. Furthermore, increased competition could hinder India’s efforts to adopt cleaner steel production methods.
The Indian steel industry is large and notorious for its environmental impact. It currently generates a significant portion of the country’s greenhouse gas emissions, a situation that could worsen if production expands as the government plans. With expectations to increase steel production from 120 million tons to 300 million tons in the next five years, the environmental implications could be severe.
Many Indian steelmakers still use coal-based blast furnaces, which lead to higher emissions compared to cleaner technologies more commonly employed in the West. Although the government has pledged to invest billions to help the industry transition to cleaner practices, most plans for expansion are still focused on coal-based production.
Experts warn that heavily investing in coal for steel production could adversely affect India’s future export potential, especially with upcoming carbon taxes in Europe that may dissuade buyers from less sustainable steel options. As the world shifts towards greener technologies, India finds itself at a crossroads. Balancing economic growth with environmental responsibility remains a daunting challenge, with companies recognizing the need to reduce emissions while also ensuring their financial viability.
Indian steel manufacturers are aware of the pressing need to become more environmentally friendly but are cautious about how costly those changes could be. The industry asserts that producing steel is essential for societal and economic growth. Finding the right balance between profitability and sustainability will be crucial for India as it strives to meet its climate goals in the years to come.
