India gets 1.64Mt EU steel quota under FTA; car imports from EU may rise sixfold

India has secured a substantial 1.64 million tonnes of steel export quota to the European Union under the recently concluded free trade agreement, as revealed by draft India-EU deal released by Brussels. This quota is divided into two components: the free trade agreement (FTA) component of 0.69 million tonnes and the most favoured nation component of 0.95 million tonnes.

While only the FTA quota is guaranteed, India's steel products will have to compete with other countries for the remaining categories. The EU's Steel Overcapacity Regulation, implemented on July 1, 2023, provides a country-specific quota of 18.3 million tonnes, with a 50% duty on out-of-quota imports. India's current steel exports to the EU are 4 million tonnes, and the TRQs aim to protect the EU's steel industry from global overcapacity.

The draft also states that India has received quotas on several value-added steel products, which, if adopted, could reduce the applicable CBAM tax burden and improve India's competitive position in the EU market. Meanwhile, the EU has secured a first-year tariff-rate quota of 100,000 completely built-up internal-combustion and non-plug-in hybrid cars from India, which is almost six times the current imports of 17,191 cars.

This concession rises to 160,000 cars by the 10th year, but only applies to cars priced above €15,000.