In a bustling suburb of Bengaluru, India, rows of small factories hum with activity as workers transform Indian-made steel into a range of products from car parts to kitchen sinks. The recent announcement by the U.S. President to introduce hefty tariffs on steel imports has found unexpected support among local industry players.
The 25% tariff is expected to render it too costly for countries like China and South Korea to continue exporting steel to the U.S., potentially resulting in an influx of cheap steel into countries such as India. This shift could prove beneficial for businesses like Sun Techpro Engineering, run by B. Praveen, which uses metal sheets in its manufacturing. Praveen foresees improved profit margins as steel prices drop, buoying thousands of similar enterprises that collectively employ over 200 million people in India and significantly contribute to the nation’s economy.
However, the prospect of cheaper steel is not welcomed by everyone. Naveen Jindal, president of the Indian Steel Association, has voiced concerns about the potential for increased steel dumping in India, as the nation operates with fewer trade restrictions compared to others. This heightened competition may jeopardize India’s efforts to advance eco-friendlier steel production, as current methods considerably contribute to greenhouse gas emissions.
With India’s steel industry being both extensive and polluting, there’s a pressing need for transformation. As one of the fastest-growing economies and the world’s most populous country, demand for steel is surging due to urbanization and industrial expansion. The government aims to ramp up steel production significantly in the coming years, but this growth could double the current emissions from steelmaking, which already account for 12% of the nation’s greenhouse gases.
Indian steel production predominantly relies on coal-based blast furnaces, which emit high levels of pollutants. While the government has announced plans to invest in cleaner production methods, current expansion efforts are primarily coal-based. Henna Khadeeja, a research analyst, points out that India is focusing on maximizing steel output before turning attention to reducing emissions post-production.
The implications of continuing with coal-intensive methods are significant. Easwaran Narassimhan, from the Sustainable Futures Collaborative, highlights that European buyers may shy away from high-emission steel due to new carbon taxes. In contrast, countries like China, with less emissions-intensive production, could face fewer obstacles. He emphasizes the long-term benefits of enduring short-term challenges in transitioning to greener steel production.
In pursuit of its climate goals, India aims to produce 500 gigawatts of clean power by the decade’s end and achieve net-zero emissions by 2070. While steelmakers acknowledge the need to cut emissions, they are concerned about the financial implications of such changes. Prabodh Acharya, a chief sustainability officer, stresses the importance of balancing economic growth with decarbonization efforts. As the industry navigates these complex challenges, finding sustainable solutions is paramount for the future.
