2 hrs ago
India Secures Duty-Free Steel Quota Access to EU
India can now send up to 2.8 million tonnes of steel to the European Union without paying import taxes.
This access is available even though the India-EU free trade agreement has not started yet.
About 1.9 million tonnes comes through country-specific and other preferential quotas.
Another possible 0.9 million tonnes may be available from shared leftover quotas.
Steel sent within these limits will have zero duty.
Steel sent above the limits could face a 50% tariff.
The EU recently reduced the amount of steel it allows into the bloc without higher duties.
India and the EU are also discussing how to check the carbon emissions linked to Indian steel.
India has secured potential duty-free access for up to 2.8 million tonnes of steel exports to the European Union.
The arrangement includes about 1.24 million tonnes in country-specific quotas and 694,853 tonnes under the EU’s preferential FTA quota.
A further residual quota could provide Indian exporters access to roughly 0.9 million tonnes, depending on availability and product categories.
Steel shipments beyond available quotas will face a 50% EU tariff under the bloc’s tighter import regime.
India and the EU have begun discussions on recognizing emissions-verification systems for steel under the Carbon Border Adjustment Mechanism.
- Who
- Indian steel exporters and the European Union, under arrangements linked to the India-EU Free Trade Agreement.
- What
- India secured potential duty-free access for up to 2.8 million tonnes of steel exports, including country-specific, preferential, and residual quotas.
- Where
- For Indian steel exports entering the European Union’s 27-nation market.
- When
- The quota regime became available from July 1; the FTA has not yet been operationalized and is expected to be implemented in early 2027.
- Why
- The arrangement is intended to support Indian steel exports as the EU tightens its steel-import regime and raises tariffs on shipments beyond quotas.
Government and Export Opportunity
Industry Caution and Implementation
Scale of market access
Government and Export Opportunity
The government describes the arrangements as providing up to 2.8 million tonnes of potential duty-free access and says they could cover more than 90% of recent steel exports.
Industry Caution and Implementation
Another government assessment cited in the reports says the negotiated quotas would cover over 80% of exports, reflecting a different calculation of coverage.
Impact of the quota system
Government and Export Opportunity
Officials say the arrangement gives India an advantage over China and other non-FTA suppliers and has effectively front-loaded benefits before the FTA takes effect.
Industry Caution and Implementation
Mangalam Worldwide Managing Director Chandragupt Prakash Mangal says exporters need greater clarity and predictability on quota volumes, allocation, and implementation to plan production and shipments.
Carbon-compliance arrangements
Government and Export Opportunity
India is seeking approval for 10 verification bodies so exporters can certify emissions domestically rather than relying exclusively on overseas agencies.
Industry Caution and Implementation
Recognition of Indian verification bodies and reporting systems remains under discussion, so the final compliance arrangements have not yet been established.
Key facts
- Potential duty-free access
- Up to 2.8 million tonnes of steel exports
- Country-specific quota
- Initially 946,616 tonnes, later increased by 300,000 tonnes to about 1.24 million tonnes
- Preferential FTA quota
- 694,853 tonnes
- Residual quota opportunity
- About 0.9 million tonnes, depending on product categories and unused quotas
- Tariff beyond quota
- 50% on steel imports exceeding available quotas
- India’s recent exports
- About 3 million tonnes of steel goods to the EU in the past year or last fiscal year
- FTA timetable
- Signing is being targeted for year-end, with implementation expected in early 2027
- Carbon verification
- India and the EU have held three meetings on recognizing emissions-verification and reporting systems under CBAM
Quotes
Senior government official
Indian government official discussing CBAM engagement with the European Union
“For the steel industry, the proposed quota mechanism will be an important factor in determining how effectively exporters can leverage the FTA with the EU. Greater clarity and predictability around quota volumes, allocation and implementation will enable manufacturers to plan production and exports with greater confidence.”
thehindubusinessline.com
“We have not waited for the FTA to get implemented and have already started the engagement. We have conducted three meetings on this with the EU.”
financialexpress.com
Sources
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