India will be able to export up to 1.64 million mt of steel annually to the European Union (EU) under the free trade agreement (FTA) with the EU, but Indian exporters will still have to bear carbon-related costs under the Carbon Border Adjustment Mechanism (CBAM), a government official said citing from a legal text of the FTA on Tuesday, September 15.
The preferential quota also does not shield Indian steel from the EU's CBAM, which applies to all steel imports and which according to one estimate could average around 35 percent of shipment value once CBAM is fully operational, he said.
The FTA provision gives India an additional preferential quota of 694,853 mt, on top of its existing 946,616 mt WTO quota. Combined, the two amount to about 68.4 percent of the 2.4 million tons of steel India shipped to the EU in 2025, the official added.
Shipments above the quota will attract the EU's 50 percent tariff.
The additional quota will become available once the India-EU FTA enters into force, expected by year-end, and will remain subject to product coverage, rules of origin and quota availability.
