India Could Export Up to 1.64 Million Tonnes of Steel Annually to EU Under Proposed FTA

India could export up to 1.64 million tonnes of steel annually to the European Union under the proposed India-EU Free Trade Agreement, although exporters would continue to face carbon-related costs under the bloc’s climate regulations.

The proposed arrangement would significantly increase the volume of Indian steel that can access the European market through preferential quota arrangements. According to an analysis cited by Reuters, the combined quota would include the existing World Trade Organization allocation of 946,616 tonnes and an additional preferential quota of nearly 695,000 tonnes.

Together, the two quotas would allow Indian steel exports to the EU to reach around 1.64 million tonnes a year under the proposed trade framework.

The development comes at a time when the European Union is tightening rules around the carbon intensity of imported industrial products. Steel exporters therefore stand to gain greater market access, but the preferential quota does not remove the carbon-related financial burden associated with exports to the region.

A key element of the proposed arrangement is the additional quota of 694,853 tonnes, which would become available once the trade agreement comes into force. The quota would remain subject to product coverage, rules of origin and other conditions under the agreement.

Flat steel products are expected to account for a significant share of the additional opportunity. Hot-rolled coil sheets and strips alone are allocated around 509,605 tonnes under the proposed preferential arrangement.

India exported about 2.4 million tonnes of steel to the European Union in 2025. The combined quota under the proposed agreement would therefore cover a substantially larger portion of India’s existing steel shipments to the bloc compared with the current WTO quota.

However, exports above the agreed quota could continue to face a 50% EU tariff, according to the Global Trade Research Initiative analysis cited in the report.

The carbon component is another important consideration for Indian steelmakers. The EU’s Carbon Border Adjustment Mechanism (CBAM) means that gaining preferential market access will not necessarily translate into proportionately lower export costs.

For Indian steel producers, the proposed FTA could nevertheless provide a more predictable route into one of the world’s largest steel-consuming markets, while increasing pressure to improve production efficiency and reduce carbon intensity.