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1.64 million-tonne tariff-rate quota secured under India-EU FTA
India secures country-specific tariff-rate quotas (TRQs) of about 1.64 million tonnes of steel products annually under the proposed India-EU Free Trade Agreement (FTA). The development is linked to the EU’s new steel import regime, which applies a 50% tariff on imports outside applicable quotas and sets product-wise quota conditions.
Steel TRQs and EU Steel Import Regime:
| Dimension | Key Details |
|---|---|
| Tariff-Rate Quota (TRQ): Definition | A TRQ is a trade policy instrument that provides for a specified quantity of a product to enter a market at a preferential or lower tariff rate. |
| TRQ: Treatment beyond quota | A TRQ mandates a higher tariff on imports beyond the specified quota. |
| India’s secured steel TRQ | India’s country-specific quota for steel products comprises 1,641,470 tonnes annually: 946,616 tonnes under the MFN component, and 694,853 tonnes under the FTA component. |
| India’s exports to the EU | India’s steel exports to the EU comprise approximately 4 million tonnes annually. |
| Out-of-quota duty under EU regime | The EU’s new regime mandates a 50% tariff on steel imports entering the EU outside the applicable quotas. |
| EU steel import regime: Applicability timeline and WTO limit | The EU’s new Steel Regulation applies from July 1, 2026, and WTO rules mandate a maximum 8-year period for temporary safeguards. |
| EU steel regime: Key provisions | The EU’s new steel regime provides for duty-free tariff quotas of 18.3 million tonnes, mandates a 50% duty on imports outside applicable quotas, and mandates a melt-and-pour requirement. |
| MFN quota basis under EU system | The system provides for MFN quotas based on each exporting country’s average share of EU imports in individual product categories during 2022-24. |
| Steel products covered under India’s country-specific quotas | The country-specific quotas apply to: non-alloy and alloy hot-rolled sheets and strips; cold-rolled sheets; metallic-coated sheets; organic-coated sheets; tin mill products; quarto plates; stainless steel products; merchant bars and light sections; reinforcing bars; wire rods; and pipes and tubes. |
| Largest Indian quota | The largest Indian country-specific quota applies to non-alloy and other alloy hot-rolled sheets and strips, and comprises 509,605 tonnes: 299,197 tonnes under the MFN component, and 210,408 tonnes under the FTA component. |
| Other product-wise quotas | Other significant quotas comprise 218,658 tonnes for cold-rolled sheets, 197,860 tonnes for metallic-coated sheets, and 186,038 tonnes for organic-coated sheets. |
| Non-disadvantage mechanism in the FTA | The agreement provides for mechanisms preventing India from being disadvantaged if the EU authorises more favourable quota access to another FTA partner. |
| Additional quota access | The agreement authorises India to access additional quota volumes in product categories where it has a country-specific quota, and mandates allocation through competition among eligible EU FTA partners having country-specific quotas. |
| Residual quota access | For categories without an Indian country-specific quota, the agreement authorises access to residual quotas, including general residual quotas and preferential quotas reserved for EU FTA partners. |
| TRQ administration commitments | The arrangement provides for TRQ administration in a transparent, objective, and non-discriminatory manner, and provides for public availability of relevant information regarding their administration. |
| Review mechanism for negotiated quotas | The agreement provides for periodic review of the negotiated quotas: the first review applies 1 year after the FTA enters into force, and subsequent reviews apply every 5 years. |
| Consultation on Product Specific Rules | The agreement provides for consultation with India on EU amendments to Product Specific Rules (PSRs) for products covered under its Steel Regulation. |