India Warns EU Scrap Curbs Could Raise Steel and Aluminium Costs

India has formally asked the European Union to ease planned restrictions on metal scrap exports, warning that the curbs could squeeze raw material supply, push up production costs and erode the benefits of a freshly concluded India-EU trade agreement. The request, reported on 29 June 2026, reflects mounting concern across India's steel and aluminium sectors, which lean heavily on imported scrap to feed furnaces and recycling lines.

Two separate EU measures are driving the worry. Under the bloc's revised Waste Shipment Regulation, exports of non-hazardous waste, including metal scrap, to countries outside the OECD group are due to be restricted from May 2027. Shipments will only continue if a destination receives EU approval by November 2026. On top of that, the European Commission has been weighing a dedicated curb on aluminium scrap exports. First flagged by trade commissioner Maros Sefcovic in November 2025, that measure was originally expected in spring 2026 but has now slipped to September 2026, easing the immediate pressure without removing it.

For India the stakes are large. The country is the world's second-largest crude steel producer and depends on imports for roughly 80 percent of its aluminium scrap needs. In 2025 it brought in about 366,000 tonnes of aluminium scrap from the EU alone and remained the bloc's biggest buyer in the first quarter of 2026. Secondary steel clusters such as Mandi Gobindgarh in Punjab, along with non-ferrous recyclers across Gujarat, Tamil Nadu and Maharashtra, rely on a steady inflow of high-grade ferrous and aluminium scrap to keep electric arc and induction furnaces running.

The EU's logic runs in the opposite direction. Brussels increasingly treats scrap as a strategic raw material that is slipping out of the continent at the very moment it needs it at home. Keeping that scrap inside Europe would let local producers make metal through recycling rather than energy-hungry primary smelting. Recycled aluminium requires only a small fraction of the energy needed to make new metal from ore, so retaining scrap supports both the bloc's decarbonisation goals and its circular economy targets. European Aluminium, which backs tighter controls, has pointed out that EU aluminium scrap exports hit a record 1.27 million tonnes in 2025, close to 50 percent above 2019 levels, and argues that too much valuable material is leaving the region.

The timing has sharpened the dispute. On 8 June 2026 India's Department of Commerce flagged the supply risk in an internal memorandum, noting that heavy reliance on high-quality scrap from developed economies like the EU and the United States left domestic industry exposed. Weeks later New Delhi escalated to a formal diplomatic request, asking to keep access to recyclable materials under the new framework. Indian officials have signalled that export quotas, rather than an outright ban, could offer a workable compromise.

External shocks are compounding the anxiety. In June 2026 the United Arab Emirates introduced its own ban on aluminium scrap exports. Because India sources roughly a fifth of its scrap from Gulf states, that move tightens an alternative channel just as the EU debate heats up. The Material Recycling Association of India has warned that spreading resource nationalism could disrupt global flows of aluminium, copper and other recycled metals, lifting procurement costs and intensifying competition among importing nations for a shrinking pool of feedstock.

Trade ties add another layer. India and the EU are moving to implement a trade agreement expected to take effect next year. While the deal does not directly tackle the EU's carbon border measures, Indian negotiators expect Brussels to avoid steps that would undercut key industries soon after the pact is signed. Scrap access has therefore become an early test of how smoothly the new economic relationship will function.

As of late June 2026 no export ban is yet in force. The Waste Shipment Regulation does not bite until 2027, the aluminium-specific curb has been pushed to September, and talks between New Delhi and Brussels are ongoing. Even so, the combination of looming EU rules, the UAE ban and record European scrap outflows has already injected uncertainty into India's metal supply chain, leaving recyclers and steelmakers to plan for a future in which high-quality imported scrap is harder and more expensive to secure.