India Secures 1.9 Mt EU Steel Quota, Another 0.9 Mt Expected Through Residual Quotas: Govt

New Delhi, Sep 18 (KNN) India has secured a country-specific tariff-rate quota (TRQ) of 1.9 million tonnes (mt) annually for steel exports to the European Union, while the government expects exporters to access another 0.9 mt through residual quotas, taking potential annual exports to around 2.8 mt, a Commerce Ministry official said on Thursday.

The combined quota is expected to cover more than 80 per cent of India's steel exports to the EU. India exported around 3.8 mt of steel worth USD 3.4 billion to the bloc in 2025-26, according to Commerce Ministry data, PTI reported.

FTA Steel Benefits Front-Loaded

The quota arrangements follow the EU's Steel Overcapacity Regulation, which came into force on July 1 and provides duty-free TRQs of 18.3 mt annually. Steel imports above the quota attract a 50 per cent tariff.

Indian exporters have already started using the quota, with the government saying the steel-related benefits negotiated under the India-EU free trade agreement (FTA) have been front-loaded even though the pact is yet to be signed and implemented.

Of India's 1.9 mt country-specific quota, 950,000 tonnes is under the FTA partner quota, with the balance under the most-favoured nation quota. The allocation is higher than the 1.64 mt figure reflected in the FTA text released by the EU earlier this month.

India can also seek access to residual quotas on a first-come, first-served basis, including quotas reserved for FTA partners.

CBAM Costs Remain Outside Quota Benefits

Think tank Global Trade Research Initiative (GTRI) said, “However, duty-free access will not mean cost-free entry. The EU’s Carbon Border Adjustment Mechanism, or CBAM, will apply to Indian steel both within and outside the quota. When fully phased in, the carbon charge could average about 35 per cent, according to estimates,” as quoted by PTI.

The government is working with the EU to expand domestic capacity for CBAM verification, including recognition of Indian verification agencies. At least 10 agencies are being targeted, with six applications already submitted, the official said.

India is also working on its Carbon Credit Trading Scheme and engaging with the EU on carbon pricing.

Wide Range of Steel Products Covered

The quotas cover products including hot-rolled and cold-rolled sheets, metallic- and organic-coated sheets, stainless steel, merchant bars, rebars, wire rods, pipes and tubes.

India and the EU concluded negotiations for the FTA on January 27. The agreement is expected to be signed by the end of 2026 and implemented next year, subject to completion of the required procedures.

(KNN Bureau)