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India Gains Wider EU Steel Access, But Carbon Levy Remains
India and the European Union have agreed on a larger limit for Indian steel exports.
The agreement would let India send up to 1.64 million metric tons of steel to the EU each year.
This includes a new quota of 694,853 tons plus an older quota of 946,616 tons.
The new combined limit would cover more than two-thirds of India’s recent steel exports to the EU.
Steel sent beyond the limit could face a 50% EU tariff.
Indian steel will still face a carbon-related charge under the EU’s Carbon Border Adjustment Mechanism.
That charge could average about 35% of the steel’s value after the system is fully introduced.
The new quota is expected to start when the trade agreement takes effect, potentially by the end of 2026.
The India-EU free trade agreement would allow India to export up to 1.64 million metric tons of steel annually to the European Union.
The deal adds a preferential quota of 694,853 tons to India’s existing 946,616-ton World Trade Organization quota.
The combined quota would cover about 68.4% of India’s 2.4 million tons of steel exports to the EU in 2025, compared with 39.4% under current rules.
Steel exports above the quota would face the EU’s 50% tariff, according to the Global Trade Research Initiative’s analysis.
The quota will not exempt Indian steel from the Carbon Border Adjustment Mechanism, which the initiative estimates could add costs averaging about 35% of import value once fully phased in.
- Who
- India and the European Union, including Indian steel exporters.
- What
- A free trade agreement would expand India’s preferential steel-export quota to the EU to 1.64 million metric tons annually, while carbon-related costs remain.
- Where
- Steel exports from India to the European Union.
- When
- The agreement was published on September 14, 2026; the additional quota is expected to begin when the agreement enters into force, potentially by the end of 2026.
- Why
- To provide India with expanded preferential access to the EU steel market under the free trade agreement.
Key facts
- Annual combined quota
- 1.64 million metric tons of steel
- Additional preferential quota
- 694,853 metric tons
- Existing World Trade Organization quota
- 946,616 metric tons
- India’s 2025 steel exports to EU
- 2.4 million metric tons
- Tariff above quota
- 50% EU tariff
- Estimated carbon-related cost
- About 35% of import value once fully phased in
- Expected implementation
- When the India-EU free trade agreement enters into force, potentially by year end
Sources
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