What happened
India secured an extra 694,853-tonne preferential steel quota from the EU under the new FTA, taking combined duty-free access to 1.64 million tonnes a year when added to the existing 946,616-tonne WTO quota.
India has secured duty-free access for up to 1.64 million tonnes of steel a year to the European Union under its new free trade agreement, combining a fresh 694,853-tonne preferential quota with its existing 946,616-tonne WTO quota.
The combined quota now covers 68.4% of India's 2.4 million tonnes of steel exports to the EU in 2025 — up from 39.4% under the old quota alone — with hot-rolled sheets and strips getting the biggest share at 509,605 tonnes, mostly flat-steel products.
But the preferential access does not exempt Indian steel from the EU's Carbon Border Adjustment Mechanism. The Global Trade Research Initiative estimates CBAM could add costs equal to about 35% of shipment value once fully phased in, wiping out much of the tariff saving.
Any steel shipped above the 1.64 million tonne threshold will still face the EU's 50% tariff, and the extra quota only kicks in after the FTA enters into force, expected by the end of 2026, subject to product coverage and rules of origin.
Why this quota matters
The EU is India's second-largest steel export market. Expanding duty-free access from 0.94M to 1.64M tonnes cuts exposure to the EU's 50% above-quota tariff and gives mills predictable access, but CBAM's carbon price keeps compliance pressure high. The legal text was released 11 September 2026 and could still be revised before the FTA enters force.
What is confirmed
Confirmed: 694,853-tonne new quota, 1.64M-tonne combined total, 50% tariff above quota, no CBAM exemption. Based on GTRI reading of the FTA legal text via Reuters wire.
- New preferential quota: 694,853 tonnes
- Combined access: 1.64M tonnes covers 68.4% of 2025 exports
- CBAM still applies — ~35% estimated cost — plus technical dialogues promised
What to watch next
Watch for the FTA entry into force (expected end-2026), final product coverage and rules of origin, and whether technical dialogues with the EU can ease CBAM for Indian producers. Hot-rolled and flat-steel allocations will shape which mills benefit first.
Why it matters for me
Mills can now ship far more steel to Europe without the 50% tariff, but GTRI says CBAM could still add ~35% in carbon costs, so the saving is not clean.
Money
Steel Exporters · Business Executives
Steel exporters get duty-free access for 68.4% of 2025 EU volumes, but CBAM could add ~35% extra cost, eating into margins.
Work
Steel Exporters
Larger flat-steel quota, especially hot-rolled sheets, could bring more stable EU orders and factory utilisation for Indian mills.
Daily Life
General Public
FTA progress shows trade opening, but the persistent carbon levy signals higher compliance costs will be part of future exports.
What to remember
Bigger quota, same carbon bill — the FTA opens the door but CBAM sets the toll.
India's EU steel quota jumps to 1.64M tonnes under FTA, yet carbon levy of ~35% stays. Bigger door, same toll.
Verified sources (8)
India gains wider EU steel access, but carbon levy remains (Reuters wire, Manoj Kumar)
↗India gains wider EU steel access, but carbon levy remains
↗India gains wider EU steel access, but carbon levy remains
↗India gains wider EU steel access under FTA, but carbon levy remains
↗India secures larger EU steel quota under trade pact, but carbon costs remain
↗India gains wider EU steel access, but carbon levy remains
↗India gains wider EU steel access, but carbon levy remains
↗Exclusive | India-EU FTA puts Indian steel in a sweet spot as EU's carbon tax looms: EU Trade Commissioner
↗Claims and linked sources
9 claimsIndia will be able to export up to 1.64 million metric tons of steel a year to the EU under the free trade agreement.
The agreement provides India with an additional preferential steel quota of 694,853 tons, on top of an existing 946,616-ton WTO quota.
The combined 1.64 million ton quota equals about 68.4% of India's 2.4 million ton steel exports to the EU in 2025, up from 39.4% under the existing quota alone.
The preferential quota does not exempt Indian steel from the EU's Carbon Border Adjustment Mechanism (CBAM), which applies to all steel imports.
Global Trade Research Initiative (GTRI) estimates CBAM costs could average around 35% of shipment value once fully phased in.
Steel shipments above the combined quota will be subject to the EU's 50% tariff.
Most of India's new preferential quota is allocated to flat-steel products, with hot-rolled sheets and strips receiving the largest single allocation of 509,605 tons.
The GTRI analysis is based on the legal text of the FTA released on Friday, 11 September 2026, and the text could still be revised.
The additional quota will become available only once the India-EU FTA enters into force, expected by year end 2026, and will remain subject to product coverage, rules of origin and quota availability.