India secures 2.8 mn tonne EU steel quota: Official

India has received a country-specific tariff-rate quota of 1.9 million tonne (MT) annually for steel exports to the European Union, while the government expects exporters to secure another 0.9 MT through residual quotas, taking the total to 2.8 MT, a commerce ministry official said on Thursday.

With this, India has secured over 80 per cent of its exports to the European Union (EU). Last fiscal, India exported about 3 MT of steel goods.

The Tariff-Rate Quota (TRQs) follow the European Union's Steel Overcapacity Regulation, which came into force on July 1 this year. It is aimed at ensuring protection for the EU's steel industry against the effects of global overcapacity. It sets free-of-duty quotas at 18.3 MT, with a 50 per cent duty for out-of-quota imports and a melt-and-pour regime to enhance transparency.

As the regulation is in place from July 1, Indian exporters have already started availing the quota and shipping steel to the 27-nation bloc, the official said, adding that “free trade agreement benefits for the steel sector have been frontloaded and first quarter's (of 2026-27) exports have already been completed”.

The exports under the quota are going at zero duty and beyond the available quota, the shipments face a 50 per cent tariff.

“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,” think tank GTRI said.

Steel quota and CBAM

The quotas cover a wide range of steel products, including non-alloy and alloy hot-rolled sheets and strips, cold-rolled sheets, metallic-coated sheets, organic-coated sheets, tin mill products, stainless steel products, merchant bars and light sections, rebars, wire rods, pipes and tubes.

As per the text, for product categories where India does not have a country-specific quota, it will have access to residual quotas, including general residual quotas open to eligible trading partners and preferential quotas reserved for EU FTA partners.

The actual quota in the FTA text was 1.6 million tonnes, but the active negotiations of Indian officials between February and June have helped in getting an additional 0.3 million tonnes. In the EU's total steel imports, India accounts for about 10 per cent.

India and the EU announced the conclusion of negotiations for the pact on January 27. It is expected to be signed by the end of this year and is likely to be implemented next year.

India-EU CBAM

CBAM is a carbon tax on goods emitting carbon during their manufacturing processes, such as fertiliser, iron and steel goods, aluminium and cement. This tax is imposed on all EU trading partners. The government is engaging with the exporters to help them comply with this regulation, the official said, adding that six institutes from India have filed applications to be recognised as an accreditation body for CBAM verifiers.

The EU has recently opened a process for verification bodies from third countries to file applications for recognition.

"We have requested the EU for faster approval of those six applications...We have identified verification bodies and have encouraged them to apply. We are looking at 10 such institutions," the official said, adding the objective is that agencies should be available in India so that domestic exporters can get their facilities verified by these bodies so that verified data is submitted to EU authorities.

The steel industry is also working to reduce its carbon emissions and ensure that whatever is reported and verified is done in the required manner. Though certain domestic steel industries are coal-based, a lot are working on green steel plants. "Many of our plants are world-class".

On carbon pricing, the commerce ministry has started discussions with the stakeholders, and on capacity building, technical and financial assistance, the EU has announced support of Euro 500 million over the next two years.

India-EU non-tariff measures

The official said that over the last two years, India has taken up the matter of listing domestic fisheries establishments with the EU.

"Now, 625 establishments of seafood are listed in the EU. They can export to the EU. Our exports are more than a billion. In July alone, 21 were listed," said the official.

India has also taken up the issue of the EU's regulation on antimicrobials, and recently India has been listed as an eligible country in that.

"It will help our fishery sector," the official said.

The regulations restrict the use of certain antimicrobials, including antibiotics, antivirals and antiprotozoals, in animals and products of animal origin imported from non-EU countries.

The rules require exporting countries to ensure that these antimicrobials are not used for growth promotion or increasing yield, or where their use is restricted in the EU for human health reasons. Non-compliant consignments can be rejected at the EU border.

UTILISATION OF THE FTA

High-level engagements are on between India and the EU to increase utilisation of the trade pact.

"We are working in a very focused manner on taking this (FTA) opportunity to people and to the businesses so that they can understand and connect with the EU side and use this FTA when it comes into force, because a lot of preparation is required," the official said.

As per the plan of action of the ministry, India will cover all EU countries by March so that Indian industry can connect with their EU counterparts and explore opportunities of working together.