India has successfully negotiated an annual country-specific tariff-rate quota (TRQ) of 1.9 million tonnes (MT) for its steel exports to the European Union. Government officials anticipate that Indian exporters will gain access to an additional 0.9 MT through residual quotas, bringing the total potential duty-free access to 2.8 MT.
This significant quota is expected to encompass more than 80 percent of India’s steel exports to the 27-nation EU bloc, which stood at approximately 3 MT in the last financial year. The move comes as Indian exporters have already begun utilizing these quotas, with benefits for the steel sector being frontloaded ahead of the formal legal ratification of the India-EU Free Trade Agreement (FTA).
EU's Steel Overcapacity Regulation
The new quota system is a direct result of the European Union’s Steel Overcapacity Regulation, which became effective on July 1, 2026. This regulation establishes 18.3 MT of duty-free quotas for steel imports, with any imports exceeding these limits subject to a substantial 50 percent duty. Furthermore, the regulation introduces a 'melt-and-pour' regime, designed to enhance transparency within the steel supply chain.
The secured quotas cover a broad spectrum of steel products. These include non-alloy and alloy hot-rolled sheets and strips, cold-rolled sheets, metallic-coated sheets, organic-coated sheets, tin mill products, various stainless steel products, merchant bars and light sections, rebars, wire rods, and pipes and tubes.
Accessing Residual Quotas
For specific product categories where India does not possess a dedicated country-specific quota, exporters retain the ability to access residual quotas. These encompass general residual quotas available to all eligible trading partners, as well as preferential quotas specifically reserved for countries with existing EU Free Trade Agreements.
The India-EU FTA negotiations concluded on January 27, with the agreement anticipated to be signed by the close of 2026 and implemented in the subsequent year. Government sources have highlighted the speed of the legal ratification process, noting that two in-person visits by legal teams have already occurred. The European Parliament is expected to pass the agreement in early 2027.
Collaboration on Carbon Border Adjustment Mechanism (CBAM)
Beyond the immediate quotas, India is also actively collaborating with the EU on guidelines for the Carbon Border Adjustment Mechanism (CBAM). This includes detailed discussions on measurement, quantity, and technical understanding of carbon footprints. Three meetings have already taken place on this critical issue, and the EU has opened the process for verification agencies, with six applications from India already submitted.