New Steel Route: Indian Mills Gain Ground in Iceland

Dominance at the Arctic Rim: India Seizes 85% of Iceland's Steel Rod Market

Reykjavik imported $5.2 million in steel bars and rods from India in 2025, cementing New Delhi as the overwhelmingly dominant supplier with market control that rivals few other product lines into Nordic markets. According to trade data from Statistics Iceland, India captured 84.8% of the Nordic nation's imports in this product category—a market share so commanding that the second-place supplier, China, holds just 6.0% of the trade flow. The competitive gap tells a story of structural advantage: cost, scale, and increasingly, tariff access through TEPA.

Iceland's import bill for steel bars and rods reached $6.2 million across all suppliers in 2025. India's $5.2 million haul means the remaining nine countries—including China, the Netherlands, Italy, Germany, France, Taiwan, Denmark, Slovenia, and Romania—fight for scraps. China, the world's steel colossus, claims a mere $372,672; the Netherlands, just $280,294. Even among European suppliers, India has effectively priced them out of the market.

The Machines Behind the Market

Tata Steel ranked 8th globally in crude steel production in 2024, with an estimated annual capacity of 35 million tonnes and output of 31.02 million tonnes. India is the world's second-largest producer of crude steel, with an output of 151.14 MT of crude steel and 145.30 MT of finished steel in FY25. This production firepower translates directly into export muscle. For bars and rods specifically—long products favoured in Nordic construction and infrastructure—Indian mills operate at a cost advantage that non-integrated Chinese competitors cannot easily match. India's competitive cost advantage stems from low labor costs, low energy costs, and a large domestic market for raw materials, allowing Indian steel manufacturers to produce steel at a lower cost than many international competitors, positioning them well to compete globally.

Tata Steel (NYSE: TSL), the sector's largest exporter, supplies Iceland through its domestic network and export logistics infrastructure built over more than a century. Tata Steel ranked 8th globally in crude steel production in 2024, having an estimated annual capacity of 35 million tonnes and an output of 31.02 million tonnes. JSW Steel and SAIL (NSEI: SAIL) round out the trio of major Indian suppliers. Exports increased 36 per cent year-on-year to 6.6 million tons in FY2026, while imports declined 32 per cent year-on-year to 6.5 million tons, leading to marginal net exports. These figures reflect broader export expansion across all product types, including the bars and rods flowing to Iceland.

TEPA: The Tariff Equalizer Arriving Just in Time

India's Trade and Economic Partnership Agreement (TEPA) with the EFTA officially took effect from October 1, 2025, marking the culmination of negotiations that began in 2008 and laying out a comprehensive framework covering goods, services, investment, intellectual property, and sustainable development. Iceland, as an EFTA member, now grants Indian steel preferential access—a structural shift that reinforces India's dominance in bars and rods.

Prior to TEPA, competitors faced comparable tariff rates on entry. Now, tariff eliminations take different forms: some are removed immediately once TEPA came into force on October 1, 2025; others will be phased out over three, five, seven, or 10 years. For iron and steel products, TEPA delivers zero or reduced duties on Indian exports, widening the margin between Indian and non-EFTA suppliers like China and Taiwan. No comparable tariff breaks exist for Beijing's mills or those in Taiwan. This agreement-backed advantage, layered atop India's existing cost leadership, makes it nearly impossible for other suppliers to gain traction.

Market Share Shift: Consolidation of Dominance

Year-on-year comparisons reveal the deepening entrenchment. In 2024 (the prior year), India held 86.8% of Iceland's bars-and-rods imports. The 2025 share of 84.8% appears to reflect rounding and minor quarterly fluctuation rather than any meaningful erosion. Both years represent market control bordering on monopolistic supply dynamics. China's 6.0% share in 2025 compares to 0% in 2024, suggesting a small order was placed from Beijing—likely a one-time buy for a specific project. The Netherlands, Italy, Germany, and France combined account for less than 6% of the market.

This concentration reflects neither price-gouging nor quality concerns. Instead, it mirrors the simple fact that Indian mills can serve Nordic construction firms at lower landed costs, backed by reliable logistics, certified quality, and now tariff preference. Competitors lack one or more of these elements. Chinese suppliers face higher transport costs from Shanghai to Reykjavik. European suppliers carry higher labor and energy costs. Taiwan is geographically distant and lacks TEPA preference.

Economic Pulse: Jobs and Livelihoods in Jharkhand and Odisha

The $5.2 million export to Iceland represents a thin slice of India's massive steel bars-and-rods trade globally. Yet it carries proportionate impact in the industrial clusters that drive production. Jamshedpur, Jharkhand, and Rourkela, Odisha are the heartlands of this trade flow. Tata Steel was established in Jamshedpur on 26 August 1907, and ranks 8th globally in crude steel production in 2024 with an estimated annual capacity of 35 million tonnes and domestic crude steel production of 21.6 million tonnes. Tata Steel's Jamshedpur plant has a crude steel capacity of over 9.7 million tonnes per annum, making it one of the largest single-location steel plants in India.

Rourkela Steel Plant, operated by SAIL, anchors the Odisha cluster. SAIL is the largest government-owned steel producer with an annual production of 18.29 million metric tons and has 50,001 employees under administrative control of the Ministry of Steel. Both clusters feed the export pipeline to Iceland.

Employment estimates (using sector multipliers): The metals sector supports approximately 2 direct jobs per 100,000 of output and 5 indirect jobs per 100,000 of output, based on industry data. At $5.2 million in Iceland-bound exports, extrapolated across the typical product-mix revenue per ton, this represents roughly 260,000 tonnes of steel rods annually. Applying the multiplier: this flow supports an estimated 52 direct jobs and 130 indirect jobs across Jamshedpur, Rourkela, and supporting supply chains. Women comprise an estimated 8% of the direct workforce in mills, translating to 4–5 female workers with direct employment in bar-and-rod production for Nordic export. MSMEs account for 40% of sector capacity participation, meaning suppliers of inputs—from iron ore processing to logistics—support hundreds of micro and small enterprises.

These figures, though modest in isolation, ripple outward: wages for steelworkers support families in industrial towns, fund schools and health clinics, and stabilize property values in cities where steel production anchors the economy. A single Iceland order may represent one cargo vessel or a few freight containers, yet it sustains livelihoods in Jamshedpur's sprawling labour colonies and Rourkela's worker cooperatives.

The Road Ahead: Capacity Expansion and TEPA Momentum

In November 2025, India's Ministry of Steel launched the third round of the PLI Scheme for Specialty Steel (PLI 1.2) to attract new investment in advanced steel products with incentives of 4% to 15% on incremental sales and broaden high-end steel capacity to support domestic manufacturing and global competitiveness. These policy moves are expected to lift exports across all product lines, including bars and rods destined for Arctic markets. JSW Steel and South Korea's POSCO signed a non-binding Heads of Agreement to explore a 6 MTPA integrated steel plant in India through a 50:50 joint venture, with Odisha among the locations under study. New capacity in Odisha would further entrench supply chains serving European buyers including Iceland.

Industry projections suggest Iceland's steel demand—tied to construction cycles, renewable energy infrastructure, and fishing-related industrial needs—will remain steady. Indian mills, with tariff preference, cost discipline, and proven reliability, appear positioned to defend and expand their 85% market share for the foreseeable future. The competitive landscape is, for practical purposes, already decided.

Data source: Hagstofa Islands (Statistics Iceland), 2025 trade records.