India gets 6.94 lakh tonnes of steel quota annually for exports under India-EU free trade pact
India has been allotted a country-specific annual steel export quota to the European Union of 16,41,470 tonnes under the India-EU Free Trade Agreement, comprising 9,46,616 tonnes under the Most Favoured Nation (MFN) component and 6,94,853 tonnes under the FTA-preferential component.
The largest single product allocation is for non-alloy and other-alloy hot-rolled sheets and strips at 5,09,605 tonnes (2,99,197 tonnes MFN plus 2,10,408 tonnes FTA).
Other significant allocations include cold-rolled sheets (2,18,658 tonnes), metallic-coated sheets (1,97,860 tonnes), organic-coated sheets (1,86,038 tonnes) and non-alloy quarto plates (1,81,835 tonnes).
Steel exports beyond the allotted quota will attract the EU's applicable out-of-quota duty rather than the preferential in-quota rate.
Tariff-Rate Quotas (TRQs) Under WTO Safeguard Law
A Tariff-Rate Quota allows a fixed volume of a product to enter at a lower ("in-quota") duty, with any additional volume attracting a higher ("out-of-quota") duty. TRQs are a recognised form of safeguard measure under the WTO framework, distinct from a simple quantitative restriction because trade is not banned beyond the quota — it is merely taxed more heavily.
Key Details
- Safeguard measures are governed by GATT Article XIX (Emergency Action) and the WTO Agreement on Safeguards (1994), which permit temporary restrictions where a surge in imports causes or threatens "serious injury" to a domestic industry
- Safeguard measures can take the form of increased duties, quantitative quotas, or TRQs, and are ordinarily capped at four years' duration (extendable to a maximum of 8 years, or 10 years for developing-country importers)
- The EU's steel safeguard has run since 2018 (originally introduced in response to trade diversion following US Section 232 steel tariffs) and has been periodically extended and revised
India's newly allotted quota sits inside the EU's evolving steel-safeguard architecture — country-specific TRQs are how the EU balances protecting its domestic steel industry with honouring preferential access it has separately negotiated with FTA partners like India.
The EU's 2026 Steel Overcapacity Regulation Replacing the 2019 Safeguard
The EU's original steel safeguard (Implementing Regulation (EU) 2019/159) expired on 30 June 2026 and has been replaced by a new permanent instrument, the Steel Overcapacity Regulation (Regulation (EU) 2026/1384), which is significantly stricter than its predecessor.
Key Details
- The new regulation raises the out-of-quota tariff from 25% to 50% and cuts the overall volume of duty-free steel imports into the EU by roughly 47% compared to the expiring safeguard
- Quotas are allocated across 26 product categories and are administered quarterly (running annually from 1 July to 30 June), with unused quota in one quarter not carried forward
- A "melt and pour" traceability requirement, effective from October 2026, requires steel to be traced to its country of melting to prevent transshipment through third countries to evade duties
- FTA partners such as India receive distinct, more favourable country-specific quota carve-outs (the "FTA component") on top of the general MFN quota available to all exporting countries
India's dual MFN-plus-FTA quota structure is a direct product of this regulatory shift — India retains its general WTO-consistent MFN access while gaining an additional preferential tranche specifically because of the concluded FTA, cushioning Indian exporters from the sharply higher out-of-quota duty applicable to non-FTA competitors.
India-EU Free Trade Agreement — Scope and Status
The India-EU FTA is the largest bilateral trade agreement either side has concluded, following roughly two decades of on-and-off negotiations. It covers goods, services and investment between economies together representing close to a quarter of global GDP.
The steel quota numbers reported are contingent on the FTA's provisions taking effect; until provisional application begins, Indian steel exporters continue operating under the EU's general MFN-based safeguard quota alone.
- Total India-specific EU steel quota: 16,41,470 tonnes annually (MFN: 9,46,616 tonnes; FTA: 6,94,853 tonnes)
- Largest category: hot-rolled sheets and strips, 5,09,605 tonnes
- EU out-of-quota steel duty under the new Steel Overcapacity Regulation: 50% (up from 25% under the expiring 2019 safeguard)
- EU steel safeguard replaced: Regulation (EU) 2019/159 expired 30 June 2026; succeeded by Regulation (EU) 2026/1384
- India-EU FTA signed: 27 January 2026, New Delhi; provisional application expected later in 2026, full entry into force expected in 2027
- Melt-and-pour traceability requirement under the new EU regulation effective October 2026