India Seeks Easier EU Steel Scrap Access in Trade Agreement
India aims to boost steel industry by easing access to EU steel scrap.
Photo by Bumgeun Nick Suh
UPSC Exam Angles
GS Paper 2: Bilateral, regional and global groupings and agreements involving India and/or affecting India's interests.
GS Paper 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Potential question types: Statement-based, analytical questions on trade agreements and their impact on Indian industries.
Visual Insights
India-EU Trade Relations: Focus on Steel Scrap
Map showing India and EU member states, highlighting the potential impact of easier steel scrap access on trade relations.
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Background
The global steel industry has historically been shaped by trade policies, technological advancements, and geopolitical factors. The rise of integrated steel mills in the late 19th and early 20th centuries, particularly in the US and Europe, led to increased demand for raw materials like iron ore and scrap metal. Trade agreements, such as the General Agreement on Tariffs and Trade (GATT) and later the World Trade Organization (WTO), have played a crucial role in regulating international trade in steel and related materials.
The evolution of steel scrap usage has been influenced by environmental concerns and the push for sustainable manufacturing practices, leading to increased emphasis on recycling and the circular economy. The EU has been a significant player in the global steel market, with its own regulations and trade policies affecting the import and export of steel scrap.
Latest Developments
In recent years, the global steel scrap market has seen increased volatility due to factors such as trade wars, supply chain disruptions, and environmental regulations. The EU has been focusing on promoting circular economy initiatives, which include increasing the use of steel scrap in steel production. This has led to stricter regulations on the export of steel scrap to ensure that it is used within the EU.
India's growing steel industry has been seeking to diversify its sources of raw materials, including steel scrap, to reduce its dependence on iron ore. The ongoing negotiations between India and the EU reflect a broader trend of countries seeking to secure access to critical raw materials through trade agreements. Future developments are likely to include increased scrutiny of the environmental impact of steel scrap trade and the implementation of stricter quality standards.
Practice Questions (MCQs)
1. Consider the following statements regarding the steel scrap market: 1. Steel scrap is a significant raw material for electric arc furnace (EAF) steelmaking. 2. The Basel Convention regulates the transboundary movement of hazardous wastes, including certain types of steel scrap. 3. Increased use of steel scrap promotes a circular economy by reducing reliance on virgin raw materials. Which of the statements given above is/are correct?
- A.1 and 2 only
- B.2 and 3 only
- C.1 and 3 only
- D.1, 2 and 3
Show Answer
Answer: D
All three statements are correct. Steel scrap is crucial for EAF steelmaking, the Basel Convention regulates its movement, and its use supports a circular economy.
2. Which of the following factors is NOT a significant driver for India seeking easier access to EU steel scrap?
- A.Reducing production costs for Indian steel manufacturers
- B.Enhancing the competitiveness of Indian steel in the global market
- C.Complying with stringent EU environmental regulations
- D.Diversifying raw material sources for the Indian steel industry
Show Answer
Answer: C
While environmental compliance is important, the primary drivers are cost reduction, competitiveness, and diversification of raw material sources.
3. Assertion (A): India is advocating for easier access to the European Union's steel scrap market. Reason (R): Increased availability of steel scrap can lower production costs for Indian steel manufacturers. In the context of the above statements, which of the following is correct?
- A.Both A and R are true, and R is the correct explanation of A
- B.Both A and R are true, but R is NOT the correct explanation of A
- C.A is true, but R is false
- D.A is false, but R is true
Show Answer
Answer: A
Both the assertion and the reason are true, and the reason correctly explains why India is seeking easier access to the EU steel scrap market.