Commerce and Industry Minister Piyush Goyal proposed on Thursday that discussions on carbon border adjustment tax be held with leading figures from the steel industry to advance sustainable manufacturing practices within the sector.
Goyal urged the industry to aim for a steel production target of 500 million tonnes by 2047, up from the current goal of 300 million tonnes by 2030. He encouraged the sector to explore innovative methods to reduce carbon emissions while enhancing productivity and steel quality.
“Let’s leverage AI to optimise production, minimise waste, and boost efficiency across the value chain. We should work towards a circular economy on a larger scale,” he stated during a virtual address at a steel conclave.
On the topic of carbon tax, Goyal suggested that a group of 4-5 top steel industry leaders meet with him to discuss the issue further.
He mentioned that the government had been unable to extend the benefits of the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to the steel sector due to a lack of funds.
He proposed the introduction of a border adjustment tax, noting that imported steel entering India is not subject to certain taxes, such as coal cess and electricity duty.
“Border adjustment tax is a WTO-compliant mechanism,” Goyal explained. “It can adjust for electricity duty or any additional state levies or taxes not charged in other countries. Let’s discuss this in more detail.”
Goyal also encouraged the industry to report any unfair trade practices observed in other countries so that India can consider retaliatory actions. He urged domestic steel producers to favour Indian-made steel, citing practices in Korea and Japan as examples.
He further highlighted the need for the industry to suggest ways to make free trade agreements more advantageous. India has never signed a free trade agreement without full agreement from the steel industry and has included stringent rules of origin to prevent domestic players from being disadvantaged.
In July, the European Union (EU) proposed that India develop its own mechanism in place of paying the EU’s carbon tax. Goyal indicated that the ministry would evaluate the EU’s suggestion and consider options beneficial to both the Indian industry and its people.
India is currently engaged in discussions with the EU regarding the Carbon Border Adjustment Mechanism (CBAM).
The EU's CBAM, set to be implemented from January 1, 2026, will require domestic companies in seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium, and hydrocarbon products, to report carbon emissions data starting October this year. India has criticised the measure and continues to negotiate with the EU on the issue.
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