India secures 1.9 MT steel export quota to EU, expects total access to reach 2.8 MT
India secured a country-specific annual tariff-rate quota of 1.9 million tonnes (MT) for steel exports to the European Union, up from 1.6 MT in the original agreement text, following further negotiations.
Exporters expect to access an additional 0.9 MT through residual/global quotas, taking total potential annual access to about 2.8 MT.
The quota operates within the EU's steel safeguard regime, intended to shield the EU steel industry from global overcapacity.
Indian steel exports will remain subject to the EU's Carbon Border Adjustment Mechanism (CBAM) regardless of the quota, as CBAM enters its definitive phase in 2026.
Implementation is expected next year following formal signature of the underlying trade agreement.
WTO Safeguard Measures (Agreement on Safeguards)
Safeguard measures are temporary trade-restrictive steps (tariffs or quotas) that WTO members may impose on a product when a surge in imports causes or threatens "serious injury" to a domestic industry — unlike anti-dumping duties (unfair pricing) or countervailing duties (subsidies), safeguards apply even to "fairly" traded imports.
Key Details
- Governed by Article XIX of GATT 1994 and the WTO Agreement on Safeguards (1995)
- Requires proof of "serious injury," a higher threshold than the "material injury" test used in anti-dumping cases
- Safeguard tariffs/quotas are generally applied on a most-favoured-nation (MFN) basis, though tariff-rate quotas can carve out country-specific allocations based on historical trade shares
- Maximum duration typically 4 years, extendable up to 8 years
The EU's steel safeguard mechanism caps duty-free steel imports through quotas, with imports above quota attracting a steep out-of-quota tariff; India's 1.9 MT allocation is a country-specific slice of this safeguard quota system.
Carbon Border Adjustment Mechanism (CBAM)
CBAM is an EU regulation requiring importers of carbon-intensive goods to purchase certificates corresponding to the embedded carbon emissions of their imports, equalising the carbon price paid by EU domestic producers under the EU Emissions Trading System (ETS) and by importers of similar goods.
CBAM applies to Indian steel exports both inside and outside the new quota, meaning the negotiated volume access does not remove the separate carbon-cost burden exporters will face as the mechanism phases in fully.
India-EU Free Trade Agreement
A free trade agreement (FTA) is a binding treaty eliminating or reducing tariffs and non-tariff barriers on goods and services trade between parties, distinct from a non-binding memorandum of understanding or a narrower Comprehensive Economic Partnership Agreement (CEPA).
The steel quota is a sector-specific outcome negotiated within the broader India-EU FTA framework, showing how safeguard-style quotas can sit alongside a general tariff-liberalisation treaty.
- Steel export quota to EU: 1.9 MT/year (country-specific), up from 1.6 MT in the original agreement text
- Additional residual/global quota access expected: about 0.9 MT, taking total access to about 2.8 MT
- CBAM definitive phase began: 1 January 2026
- CBAM covered sectors: iron and steel, cement, aluminium, fertilisers, hydrogen, electricity
- EU support pledged for CBAM compliance capacity-building: EUR 500 million over two years
- India-EU FTA concluded: January 2026, after nearly 20 years of negotiations