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India is negotiating for easier access to steel scrap from the European Union as part of a trade deal, responding to the EU's Carbon Border Adjustment Mechanism (CBAM) that imposes duties on imports with higher carbon emissions. The initiative aims to increase the share of scrap in India's steel production to 50% by 2047, utilizing electric arc furnace technology to reduce carbon emissions.

Currently, scrap constitutes only 20% of India's steel feedstock due to limited domestic availability. The EU is the largest producer of steel scrap, but its recycling policies limit exports to other countries, creating a non-tariff barrier for Indian manufacturers. India's ferrous scrap imports have more than doubled since 2013, and global scrap availability is projected to decline, further complicating India's steel production efforts.