India Secures Wider EU Steel Export Access, Carbon Levy Stays in Place
Key Details of the India-EU Steel Export Agreement
By Manoj Kumar
Export Quotas and Preferential Access
NEW DELHI, Sept 14 (Reuters) - India will be able to export up to 1.64 million metric tons of steel a year to the European Union under a free trade agreement, but exporters will still face carbon-related costs, according to the legal text of the pact.
Breakdown of Quota Allocations
• The agreement provides India with an additional preferential quota of 694,853 tons of steel, on top of an existing 946,616 ton WTO quota.
• The combined quota is equivalent to about 68.4% of India’s 2.4 million tons of steel exports to the EU in 2025, up from 39.4% under the existing quota.
Tariffs and Product Coverage
• Steel shipments above the quota will be subject to the EU’s 50% tariff, according to a Global Trade Research Initiative (GTRI) analysis of the legal text of the agreement, which was released on Friday and could still be revised.
• The preferential quota does not exempt Indian steel from the EU's Carbon Border Adjustment Mechanism, which applies to all steel imports, and which GTRI estimates could average around 35% of the value once fully phased in.
• Most of India’s quota is allocated to flat-steel products, with hot-rolled sheets and strips receiving the largest allocation of 509,605 tons.
Implementation Timeline
• The additional quota will become available once the India-EU FTA enters into force, expected by year end, and will remain subject to product coverage, rules of origin and quota availability.
(Reporting by Manoj Kumar; Editing by Kirsten Donovan)