FM invites Worldsteel to open India office, says carbon tariffs won’t solve steel glut | Today’s news

New Delhi: Union Finance Minister Nirmala Sitharaman on Monday invited the World Steel Association (Worldsteel) to set up an office in India, citing the country’s growing importance as a driver of global steel demand and its expanding production capacity.

It also called for a coordinated approach to decarbonisation, arguing that unilateral tariffs, including measures such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), would not solve the structural problem of global steel overcapacity.

Speaking at the Worldsteel AGM in New Delhi, Sitharaman said India has become the single largest source of incremental global steel demand, making a stronger presence in the country increasingly important for the industry’s global representative body.

“As Worldsteel enters its 60th year, I would like to invite the Association to consider setting up an office in India,” she said, noting that the association opened its Beijing office in 2006, when China accounted for much of the growth in global steel demand.

The invitation comes as a global one the steel industry faces declining production, growing excess capacity, and growing trade and energy uncertainty. Global crude steel output fell 2% to 1.85 billion tonnes in 2025 and fell another 0.7% during January-August 2026, Sitharaman said. The Organization for Economic Co-operation and Development projects that global excess capacity will increase from 600 million tonnes in 2024 to 720 million tonnes by 2027, exceeding the combined production of all OECD members.

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In this context, she said the industry needs to expand where there is real demand, correct structural imbalances and secure supply chains while reducing emissions. “Progressive unilateral tariffs only divert excess steel from one market to another,” Sitharaman said he advocated for multilateral disciplines on subsidies that maintain non-economic capacity, supported by transparent data and rules-based trade.

The impact of the carbon tax in the EU

Her remarks come as the European Union’s CBAM enters its final phase, increasing the importance of measuring carbon-related emissions and costs for steel exporters seeking access to the European market. Sitharaman emphasized that the transition to low-carbon steelmaking must be accompanied by credible emissions measurement, technology development and fair sharing of transition costs.

“Decarbonize at a pace that matches our evolution,” she said, calling emissions reductions a long-term priority. India is expanding capacity to meet domestic infrastructure and industry requirements.

India, the world’s second-largest steel producer as of 2018, increased crude steel production by 10% to 165 million tonnes in 2025, while output grew by another 6% during January-August 2026, according to the minister. Its share of global steel production rose from 5.2% in 2014 to about 9%.

Domestic consumption of finished steel has more than doubled over the past decade to 164 million tonnes in 2025-26. Consumption has exceeded production for two consecutive years, underscoring the strength of domestic demand. India is projected to account for about twice the net increase in global steel demand in 2026 and about 40% of the increase in 2027, based on Worldsteel’s April 2026 short-term outlook.

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Sitharaman attributed this growth largely to sustained public investment. The capital expenditure of the Union Government has increased by about six times ₹2 crores in 2014-15 ₹12.2 lakh crore in 2026-27. With construction and infrastructure accounting for nearly two-thirds of India’s steel consumption, spending on highways, railways, ports, airports and metro networks provides a steady market for manufacturers.

But she said capacity expansion must be accompanied by improvements in raw material security, specialized manufacturing, technological capabilities and environmental performance.

Decarbonization strategy

India’s decarbonisation strategy includes greater use of scrap steel, renewable electricity, direct reduced iron technology and green hydrogen. As part of the National Green Hydrogen Mission, four pilot projects for the use of green hydrogen in steel production were awarded. Sitharaman also pointed to the potential of artificial intelligence in improving the efficiency of furnaces and rolling mills, as well as emerging nuclear technologies in providing reliable low-carbon electricity.

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The government’s priorities include expanding domestic production of special and high-grade steel, reducing dependence on specialized imports, and improving recycling. Incentive program for special steel linked to production with approved expenditure of Rs ₹6,300 million crowns is intended to support investments and technology modernization.

Sitharaman also emphasized the importance of traceable carbon data for every tonne of steel delivered, saying this is becoming an important condition for accessing premium markets.

India’s steel exports grew by 36% in 2025-26 even as domestic consumption grew by 7.6%, she said, underscoring the country’s potential as a supplier to global markets.

A stronger Worldsteel presence in India, Sitharaman said, would tie the association more closely to one of the world’s fastest-growing steel markets and provide a base for cooperation with South Asia, Southeast Asia, West Asia and Africa.

The broader challenge, she said, was to expand steel production while reducing its carbon intensity without trade barriers replacing a coordinated solution to global overcapacity.