Unpacking India's Scrap Steel Trade Dynamics

Amid rising global demand and tightened supply, scrap steel has become a critical input for India's steel sector, with imports accounting for nearly 30 percent of domestic scrap consumption and total iron and steel imports. As key supplier countries increasingly impose export restrictions, India faces heightened exposure to supply disruptions. This study assesses the potential macroeconomic impacts of trade restrictions on India's steel industry and broader economy. Using ICRIER's Samriddhi Global Trade Model, built on the GTAP-Circular Economy (GTAP-CE) Version 11 and GTAP-Power framework, we analyse the structural vulnerabilities for countries dependent on imports and quantify the impact posed by increasing trade protectionism. Results highlight that an export ban scenario leads to an 8 percent decline in India's scrap steel imports, while triggering a 14 percent increase in the output of the domestic recycling industry. These findings further emphasize the strategic urgency of scaling up domestic recycling capacity as a long-term solution to meet rising demands and build domestic resilience.