India Locks In EU Steel Quota as Trade Deal Moves Toward Ratification

The European Union has published draft text setting out a country-specific steel quota for India, a concrete step in implementing the India-EU free trade agreement that Prime Minister Narendra Modi, European Council President António Costa and European Commission President Ursula von der Leyen concluded in New Delhi in January 2026. Under the text released in mid-September, India can ship up to 1.64 million tonnes of steel a year into the bloc without facing the EU’s new out-of-quota tariff, made up of roughly 695,000 tonnes tied specifically to the free trade agreement and about 947,000 tonnes under the EU’s general most-favoured-nation allocation.

Part of a wider EU clampdown on steel imports

The quota sits inside the EU’s Steel Overcapacity Regulation, which came into force on 1 July 2026 and replaced the bloc’s previous safeguard measure. The European Parliament, which approved the underlying rules in May by a vote of 606 to 16, cut the EU’s total duty-free import allowance by roughly 47 per cent compared with 2024 levels, to 18.3 million tonnes a year, while doubling the tariff on steel entering above quota to 50 per cent. Lead MEP Karin Karlsbro said at the time that “Europe needs a strong and competitive steel industry built on trade, innovation and fair competition,” and the regulation also introduces a “melt and pour” traceability rule to verify where steel was actually produced.

Relief for exporters, but not full satisfaction

India’s Commerce Ministry said the arrangement would keep more than 80 per cent of the country’s current steel exports to the EU protected from the higher tariff, according to reporting by ETV Bharat, and noted that six foreign bodies had applied to certify Indian exporters under the EU’s carbon border rules. Industry figures were less enthusiastic: exporters of hot-rolled sheets, stainless products and wire rods told reporters the quotas still leave shipments above the cap exposed to the 50 per cent duty, and called for the ceilings to be raised before the wider trade deal is formally ratified.

Why it matters

Steel was one of the toughest sticking points in nearly two decades of India-EU trade talks, and the new quota shows Brussels and New Delhi trying to reconcile a landmark free trade agreement with the EU’s separate, more protectionist steel policy. India shipped roughly 3-4 million tonnes of steel to the EU in the last financial year, so the coverage of the new quota will directly shape exporters’ margins while the two sides work toward formally signing and ratifying the broader pact.