India has secured a country-specific tariff-rate quota of around 1.64 million tonnes of steel exports per year to the European Union under the proposed India-EU Free Trade Agreement. The quota comes at a time when the EU has tightened its steel import rules and is putting greater controls on imports amid concerns over global steel overcapacity. For Indian steel producers and exporters, the agreement provides a defined route into one of the world's major steel markets, although the quota will cover only part of India's existing exports to the bloc.
1.64 MT quota divided into two components
The total country-specific quota stands at 1,641,470 tonnes annually. Of this, 946,616 tonnes will fall under the Most Favoured Nation (MFN) component, while another 694,853 tonnes will be available under the India-EU FTA component. The distinction is important because the FTA portion is specifically negotiated for India, while the MFN component forms part of the wider quota system applicable to eligible trading partners.
India currently exports around 4 million tonnes of steel to the EU each year, which means the newly allocated country-specific quota does not cover the entire volume currently going into the European market. Exporters will therefore still have to look at other available quota channels and the applicable tariff arrangements when planning shipments beyond the country-specific allocation.
Hot-rolled steel gets the largest allocation
The quota covers a fairly wide range of steel products rather than being limited to one particular category. These include non-alloy and alloy hot-rolled sheets and strips, cold-rolled sheets, metallic-coated sheets, organic-coated sheets, tin mill products, stainless steel products, merchant bars and light sections, reinforcing bars, wire rods, pipes and tubes and other products. This gives Indian producers across both flat and long steel segments an opportunity to use the new arrangement.
Among the individual categories, non-alloy and other alloy hot-rolled sheets and strips have the largest country-specific allocation at 509,605 tonnes. This comprises 299,197 tonnes under the MFN component and 210,408 tonnes under the FTA component. Cold-rolled sheets have a total quota of 218,658 tonnes, while metallic-coated sheets have 197,860 tonnes, showing that a sizeable portion of the allocation is directed towards flat steel products.
EU has introduced a tougher steel import regime
The quota arrangement comes alongside the EU's new Steel Overcapacity Regulation, which came into force on 1 July 2026. Under the new system, the EU has set an overall duty-free steel import quota of 18.3 million tonnes a year, while imports entering outside the applicable quotas face a 50% tariff. The system also includes a melt-and-pour requirement aimed at improving transparency around the origin and production of imported steel.
For Indian exporters, this makes the negotiated quota more important than simply being an additional trade provision in the FTA. Shipments that can be accommodated within the relevant quota can avoid the much heavier out-of-quota tariff, while exporters moving volumes beyond those limits will have to factor the EU's applicable tariff structure into their costs and pricing. This could make quota utilisation and product-wise planning increasingly important for Indian mills selling into Europe.
More quota access could be possible
The agreement does not completely close the door once the country-specific quota is exhausted. In product categories where India has a country-specific quota, Indian exporters will also be able to compete for additional volumes available among EU FTA partners. For categories without a specific Indian allocation, exporters can use residual quotas available under the EU system, subject to the applicable conditions.
The arrangement also provides for a review of the quotas. The first review is expected one year after the FTA comes into force, followed by reviews every five years. The EU has also committed to administering the quotas in a transparent and non-discriminatory manner and making relevant information on their administration publicly available.
Steel exporters get more clarity, but utilisation will matter
The India-EU FTA negotiations were concluded earlier this year, and the European Commission has now moved the agreement closer to the signing stage by submitting its proposal to the European Council. The agreement still needs to complete the required approval and ratification process before it becomes operational.
For India's steel industry, the 1.64 MT quota provides a more defined export route into the EU at a time when access to the market is becoming more regulated. However, the actual benefit will depend on how effectively Indian mills use the allocation across different product categories, particularly since India's existing exports to the EU are much higher than the country-specific quota. With the EU also tightening its steel import regime and introducing a 50% duty on out-of-quota volumes, product selection, quota availability and export planning are likely to remain important for Indian steel exporters.