India Secures Major Steel Export Quotas to the EU: What You Need to Know

India's Steel Export Quotas to the EU

New Delhi: India has been granted specific tariff-rate quotas (TRQs) amounting to 1.64 million tonnes each year for the export of steel products to the European Union. Of this total, 694,853 tonnes will be allocated under the free trade agreement, as outlined in the draft agreement released by the EU.

The overall country-specific quota of 1,641,470 tonnes includes 946,616 tonnes designated under the Most Favoured Nation (MFN) category and 694,853 tonnes under the Free Trade Agreement (FTA) category.

These quotas encompass a diverse array of steel products, such as non-alloy and alloy hot-rolled sheets, cold-rolled sheets, metallic-coated sheets, organic-coated sheets, tin mill products, stainless steel items, merchant bars, light sections, rebars, wire rods, and pipes.

Currently, India exports approximately four million tonnes of steel to the EU annually.

The TRQs are part of the European Union's Steel Overcapacity Regulation, which took effect on July 1 this year. This regulation aims to protect the EU's steel sector from the impacts of global overcapacity, establishing duty-free quotas of 18.3 million tonnes, with a 50% duty on imports exceeding these quotas, along with a melt-and-pour system to enhance transparency.

According to the draft, the largest specific quota is allocated for non-alloy and other alloy hot-rolled sheets and strips, totaling 509,605 tonnes, which includes 299,197 tonnes under the MFN and 210,408 tonnes under the FTA.

Following this, cold-rolled sheets have a total quota of 218,658 tonnes, while metallic-coated sheets are allocated 197,860 tonnes.

Other significant quotas include 186,038 tonnes for organic-coated sheets, 181,835 tonnes for non-alloy and other alloy quarto plates, 85,157 tonnes for another type of metallic-coated sheets, and 79,278 tonnes for stainless steel bars and light sections.

The TRQs for steel products imported from India will take effect when the EU Steel Regulation is implemented.

Steel imports from India that exceed these quotas will incur the standard base-rate duties as per the EU's tariff commitments.

The draft states, 'If the European Union modifies the Product Specific Rules (PSRs) for items covered under the EU Steel Regulation, it will consult with India immediately upon proposing such changes.'

The EU will manage the TRQs in a transparent, objective, and non-discriminatory manner to promote trade and facilitate effective utilization.

This includes timely public access to all relevant information regarding the administration of these TRQs.

Additionally, India will gain access to extra quota volumes in categories where it has a specific quota, with these additional volumes being allocated through competition among EU FTA partners with country-specific quotas.

For categories without a specific quota for India, it will have access to residual quotas, including general residual quotas available to eligible trading partners and preferential quotas reserved for EU FTA partners.

The agreement stipulates periodic reviews of the quotas, with the first review set to occur one year after the FTA is enacted, followed by reviews every five years.

India and the EU announced the conclusion of negotiations for this agreement on January 27, with expectations for it to be signed by the end of this year and implemented in the following year.