New Delhi, Sept. 30 -- India's metalmakers could soon face a costly question: where will they find the scrap needed to keep their factories running? A proposed European Union (EU) rule that could restrict shipments of metal scrap to India threatens to disrupt supplies of a key raw material, potentially raising production costs and squeezing manufacturers, particularly smaller businesses.

The proposed restrictions could affect steel, aluminium and copper manufacturers that rely on imported scrap, forcing them to look for alternative suppliers. Industry executives and experts warn that sourcing material from elsewhere may not be easy, with higher procurement and logistics costs potentially hurting export competitiveness.

India imports aro...