India secures expanded EU steel quota under trade agreement

India has secured enhanced market access for steel exports to the European Union through a recently concluded free trade agreement, providing the country with an additional preferential quota of 694,853 tonnes on top of the existing 946,616-tonne WTO allocation.

The expanded quota represents a significant gain for Indian steel manufacturers seeking to strengthen their foothold in European markets. The preferential access means Indian steel will benefit from reduced tariffs compared to non-agreement countries, potentially improving competitiveness in a key international market.

However, the agreement does not fully address India's concerns regarding the EU's Carbon Border Adjustment Mechanism (CBAM), a proposed carbon levy on imported steel and other carbon-intensive products. The mechanism, scheduled for full implementation in coming years, could impact the cost advantage gained through the preferential quota if Indian exporters face additional carbon-related charges.

Indian steel industry representatives have called for continued negotiations to ensure the carbon levy framework accounts for India's lower per-unit emissions and developing economy status. The trade agreement represents progress on market access but leaves unresolved questions about the long-term competitiveness of Indian steel in the European market.