India’s ferro alloys industry is feeling the heat of global trade headwinds and fearing a scaling down of exports as trade barriers and carbon border taxes impose major threats.
Despite doubling its ferro alloys manufacturing capacity in the last five years, industry representatives say steel production has weakened globally.
“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,” said Manish Sarda, Chairman, Indian Ferro Alloy Producers' Association (IFAPA).
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.
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India is the world's top exporter of manganese alloys and the third-largest supplier of ferro chrome.
While the country almost doubled its ferro alloys manufacturing capacity from 4.3 million tonnes in FY20 to 8 million tonnes as of March 31, 2025, as per BigMint data, consumption stands at just around 3.4 million tonnes against 2.8 million tonnes in FY20.
However, 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.
Sarda said the threats facing the sector must be tackled in a two-tonged approach by the government.
"First, direct government intervention by way of 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 will help.
Secondly, enhanced competitiveness by means of rationalisation of electricity charges and ensuring long-term availability of critical raw materials is crucial. Of course, we must gradually transition to low-carbon production processes and adopting sustainability measures in industry,” the industry body chief said.
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