Indian steel exporters await clarity as new EU FTA quotas emerge

The steel tariff-rate quota (TRQ) arrangements under the India-EU free trade agreement (FTA), initially seen as providing India with wider access to the EU steel market, have come under closer scrutiny following the publication of detailed product-level allocations. While the agreement provides a total guaranteed country-specific quota of 1.64 million mt, a comparison with India's current entitlements under the EU's new steel import regime shows that the allocations for several key steel products are actually lower, leaving uncertainty over the extent of the additional market access provided by the FTA.

As SteelOrbis previously reported, the FTA provides India with total country-specific quotas of 1.64 million mt, comprising a most-favoured nation (MFN) component of 946,616 mt and an FTA component of 694,853 mt. The arrangement was initially interpreted as providing India with wider access to the EU steel market by adding the preferential FTA allocation to the MFN component.

However, the detailed product allocations have since prompted the Indian steel industry to question that interpretation. Market participants have pointed out that the 1.64 million mt total guaranteed country-specific allocation under the FTA is around 300,000 mt below the country-specific quotas allocated to India under the EU steel regulation in June.

The differences in major steel quotas can be seen in the table below (mt).

The Indian steel industry is consequently seeking 29-35 percent higher quotas across steel product categories, according to a report by Reuters. Reuters has also shared a note submitted to India's trade ministry saying, “India's total guaranteed country-specific quota under the agreement is smaller than its current total entitlement, putting the country in an unfavorable position with regard to market access.”