80% steel exports get EU tariff cover under FTA

India has secured a significant quota for steel exports to the European Union, potentially safeguarding over 80% of its steel shipments through a free trade agreement. The government expects exporters to utilize an additional 0.9 million tonnes of residual quotas, bringing the total to 2.8 million tonnes. This arrangement comes as the EU tightens restrictions on steel imports.

Indian exporters began using the quota from July 1 when the Steel Overcapacity Regulation went into effect. The EU limits free-of-duty imports to 18.3 million tonnes per year, imposing a 50% duty on excess imports. While the duty-free access provides a significant advantage, Indian exporters must also contend with the EU's upcoming Carbon Border Adjustment Mechanism (CBAM), which will apply a carbon charge averaging around 35% once fully implemented.

India is working to establish its capacity for CBAM verification, aiming to have at least 10 domestic verification agencies recognized. The government is also collaborating with the EU on carbon pricing discussions and monitoring any potential expansion of CBAM to additional products.