India’s steel exporters get wider EU access even before FTA kicks in

A new 1.9-million-tonne country-specific quota, plus residual access, could allow India to ship up to 2.8 million tonnes of steel annually to the EU

India’s steel exporters could get significantly more duty-free access to the European Union (EU) than envisaged in the India-EU free trade agreement (FTA), with a new quota regime covering up to 2.8 million tonnes of annual shipments even before the FTA takes effect.

India has secured a 1.9 million-tonne annual country-specific quota for steel exports to the EU, while exporters could access another 0.9 million tonnes through residual quotas on a first-come, first-served basis, a senior government official said.

India exported 6.6 million tonnes of finished steel in fiscal year 2026 (FY26), of which about 3 million tonnes went to the EU.

Queries emailed on Thursday evening to the EU and commerce and industry ministry remained unanswered until press time.

Indian steel exporters have already started benefiting from the new quota regime, even though the wider India-EU FTA is not yet in force. The EU’s new steel import regime took effect on 1 July 2026, providing tariff-rate quotas for steel imports.

“FTA benefits for the steel sector have been frontloaded,” the official said, adding that Indian exporters had already started using the new regime.

Quota access, however, does not remove the EU’s Carbon Border Adjustment Mechanism (CBAM), which continues to apply to steel even when shipments fall within the tariff-rate quota. CBAM effectively acts as a carbon levy on imports based on their embedded emissions. The bloc began its transitional phase in 2023, with the financial mechanism taking effect this year.

India is working with the EU to build domestic capacity for CBAM verification, including recognition of Indian verification agencies. The government is looking at at least 10 agencies, with six applications already submitted, and has asked for faster approvals so exporters can access verification agencies domestically rather than depend on a limited pool of overseas agencies.

India is also working on its Carbon Credit Trading Scheme and discussing carbon pricing with the EU.

The government separately aims to double India’s exports to the EU over the next three to four years through the FTA, which is nearing implementation.

In FY26, India’s exports to the EU stood at $72.3912 billion, accounting for 16.40% of total exports, and falling 4.6% year-on-year.

“We can double our exports to the EU in the next three to four years,” the official said. The government plans to cover all EU member states through high-level delegations and business-to-business meetings by March 2027, with the aim of ensuring that the preferential market access secured under the FTA translates into higher shipments.

“We are ensuring the FTA is utilized when it comes into force,” the official said. Exporters have to increase their capacity, enhance exports and also comply with standards.

Negotiations on the India-EU FTA concluded on 27 January. The agreement is currently moving through the EU’s legal and approval process. The European Commission has submitted proposals to the EU Council concerning the signing and conclusion of the agreement.

The government expects European Parliament approval by March 2027, after which the pact would move towards operationalization, subject to completion of the remaining procedures.

“The India-EU FTA marks an important step towards…creating greater market access for Indian manufacturers. For the steel industry, the proposed quota mechanism will be an important factor in determining how effectively exporters can leverage the agreement. Greater clarity and predictability around quota volumes, allocation and implementation will enable manufacturers to plan production and exports with greater confidence…A transparent and well-calibrated framework can support sustained growth in India’s steel exports while strengthening the competitiveness of Indian manufacturers in the European market,” said Chandragupt Prakash Mangal, managing director, Mangalam Worldwide Ltd