Steel bars reshape India-Iceland supply chains

Dominating the Nordic Market: How India Secured 85% of Iceland's Steel Bars and Rods Supply

$5.2 million in annual shipments reveals an overwhelming competitive advantage for Indian exporters. India has built a footprint in Iceland consisting primarily of iron and steel bars and rods, along with certain chemicals, commanding a market position that relegates traditional European suppliers to marginal roles.

Based on 2025 import data, India controls the majority of Iceland's imports of steel bars and rods—non-alloy grades that power construction, manufacturing, and infrastructure sectors across the Nordic nation. Tata Steel ranked 8th globally in crude steel production in 2024 with an estimated annual capacity of 35 million tonnes and an output of 31.02 million tonnes, and with a domestic crude steel production of 21.6 million tonnes, it is one of the largest steel producers in India. The company's reach into EFTA markets exemplifies how Indian steelmakers have become the first-choice suppliers for Nordic buyers seeking both cost efficiency and reliability.

The Competitive Hierarchy: Who Wins, Who Trails

India's market dominance reshapes the traditional European supply map. China ranks second, supplying roughly 6% of Iceland's imports in this category. The Netherlands follows at 4.5%, while Italy, Germany, France, Taiwan, Denmark, Slovenia, and Romania each hold single-digit market shares. The contrast is stark: India's 87% share versus China's 6% reflects not price war dynamics alone, but structural advantages in scale, capacity, and trade agreements that Chinese competitors cannot easily match.

The top five exported products during FY26 (April-July 2025) included bars and rods as one of the leading categories, confirming that long steel products remain core to India's export strategy. Secondary steel plants, including MSMEs, accounted for 47% of crude steel capacity in FY25, meaning India's supply advantage rests on a diverse ecosystem spanning large integrated plants, mini-mills, and specialized producers.

TEPA: India's Game-Changing Trade Edge

India's Trade and Economic Partnership Agreement (TEPA) with the EFTA officially came into 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. For steel exporters, the TEPA removes tariff barriers that non-EFTA suppliers—particularly China—cannot exploit.

EFTA states will liberalise approximately 92.2 percent of their tariff lines for Indian exports. This preferential access directly strengthens Indian mills' pricing competitiveness against Chinese rivals who must navigate MFN (Most Favoured Nation) duty rates. The agreement rewards early movers—Indian firms already embedded in Nordic supply chains—while creating friction for latecomers attempting to displace established relationships.

India has previously exported a small footprint to Iceland and Liechtenstein, primarily consisting of twine netting, iron and steel bars and rods, and certain chemicals. The TEPA accelerates this existing trade flow by lowering costs and streamlining logistics, making Iceland an increasingly attractive destination for Indian producers seeking to diversify away from price-sensitive markets.

Real Steel: The Companies Behind India's Dominance

Tata Steel, founded as Tata Iron and Steel Company (TISCO) on 26 August 1907, started pig iron production in 1911 and began producing steel in 1912 as a branch of Jamsetji's Tata Group. The company's capacity and technical expertise position it as a lead player in exports to developed markets, including Nordic nations.

JSW Steel was founded in 1982 and has rapidly grown to become one of India's leading steel manufacturers, with a diverse range of products serving industries such as automotive, infrastructure, and energy, and has scaled production to over 28 million tons per annum while maintaining strategic collaboration with global leaders such as JFE Steel of Japan. JSW's aggressive expansion into value-added products strengthens India's position in premium EFTA markets where quality matters alongside cost.

In February 2024, JSW announced a US$ 7.8 billion investment for a 13.2 MT steel plant in Odisha, expected to create 30,000 jobs—a signal that Indian steelmakers are betting heavily on sustained export demand to Europe and beyond.

Why India Wins: Cost, Capacity, and Commodity Access

One of the main drivers of India's steel exports is the country's competitive cost advantage, with relatively low cost of production due to factors such as low labor costs, low energy costs, and a large domestic market for raw materials. Iceland's small population and import dependence mean buyers prioritize reliable suppliers offering consistent quality at lower landed costs—a formula Indian mills have perfected.

Another key driver of India's steel exports is the country's quality advantage, with India's steel industry having made significant investments in technology and research and development, leading to the production of high-quality steel products that are competitive with those produced by other countries, and helping to establish India's reputation as a reliable supplier.

India's steel production capacity had increased to 200.33 MT and is projected to reach 300 MT by FY30, and India also holds vast iron ore reserves, with the potential to produce 700 MT annually, making it the second-largest producer globally. This vertical integration—from raw materials through finished products—ensures India can supply Nordic buyers at prices competitors cannot undercut.

Jobs and Livelihoods: Where Indian Steel Meets Nordic Demand

The $5.2 million annual trade in steel bars and rods to Iceland translates into tangible employment across Indian industrial clusters. In terms of geography, Jharkhand, Chattisgarh, Odisha, and Karnataka are the key steel producing states in India, with both iron ore mines and BF-BOF (Blast Furnace-Basic Oxygen Furnace) steel capacities, and these states house key steel plants including Tata Steel's largest steel plant in Jamshedpur and integrated plants under Steel Authority of India Limited (SAIL) in Rourkela.

Using standard sector multipliers, this Nordic trade flow—modest as it appears in global steel terms—supports meaningful livelihoods in Jamshedpur, Jharkhand and Rourkela, Odisha. Estimated employment impact: Based on the metals sector multiplier of 2 direct jobs per 100,000 units of production and 5 indirect jobs, the $5.2 million export value (approximately 5,000 tonnes) translates to an estimated 100–150 direct manufacturing jobs and 250–375 indirect supporting roles (logistics, warehousing, trade finance, administration). These figures are estimates using standard sector multipliers and should be treated as indicative.

Secondary steel plants, including MSMEs, accounted for 47% of crude steel capacity in FY25, meaning a significant portion of exports originate from smaller, family-owned producers scattered across industrial towns. Steel has an employment multiplier effect of 6.8x, and the steel industry now contributes ~2% to India's GDP and employs ~5 lakh people directly and 20 lakh people indirectly.

Women's participation in steel manufacturing remains modest at approximately 8%, concentrated in administrative, quality assurance, and logistics roles rather than shop-floor production. MSME participation, at roughly 40% of crude steel capacity, anchors rural and tier-2 industrial centers—notably in Odisha and Jharkhand—where alternative employment opportunities are limited and export markets create vital income streams for communities dependent on steel-related activity.

The Competitive Outlook: Can Anyone Dethrone India?

China's 6% share offers only limited strategic threat so long as Indian capacity remains available and TEPA tariff advantages persist. This has helped India return to net exporter status, with exports increasing about 33 per cent to 4.8 million tonnes, while imports fell roughly 37 per cent to 4.65 mt, signaling that domestic demand pressures—which once squeezed exports—are easing. European producers (Netherlands, Italy, Germany) compete only on specialty grades or premium applications where proximity and service, not price, drive purchasing decisions.

The real constraint on India's growth lies not in competition but in Iceland's modest import appetite. A population of 380,000 supports limited construction and infrastructure activity, capping total market size at roughly $6 million annually. For Indian steelmakers, Iceland represents a foothold in Nordic supply chains and a test case for TEPA benefits—not a large-volume destination. The strategic value lies in deepening relationships with Icelandic importers and using Nordic credentials as a credential for selling to larger EU markets.

As long as EFTA countries have collectively pledged to increase investments in India by USD 100 billion over 15 years – an investment package aimed at boosting India's manufacturing sector and generating an estimated one million jobs, Indian steelmakers will enjoy structural tailwinds that maintain competitive advantage in Nordic markets. The TEPA signals a long-term strategic partnership—not a temporary trade opening—cementing India's role as a preferred supplier across EFTA for decades to come.