EU quotas: A double whammy for Indian steel?

A proposal by the European Union (EU) to slash quotas in steel imports and impose a $0 per cent tariff on over-quota shipments may spell a “double whammy” for Indian exporters next year, according to industry experts.

- ISHITA AYAN DUTT

Earlier this month, the European Commission proposed to shield the bloc’s steel industry from the impact of global overcapacity. The plan is to reduce tariff-free imports to 18.3 million tonnes (mt) a year — a 47 per cent cut from 2024 levels — and double the out-of-quota duty to 50 per cent.

‘The EU also proposes to replace its steel safeguard measure — it’s set to expire by June 2026 — though the European Parliament and the Council will have to agree on the final regulation.

‘The quota proposal combined with the Carbon Border Adjustment Mechanism (CBAM), a tariff system set to be implemented from January 2026, is expected to make the landed cost of Indian steel in the EU less competitive.

India exports around 45 percent of its steel to the EU, its single largest market.

The bloc imported 27.4 metric tonne (mt) of finished steel in 2024, said Sehul Bhatt, director of Crisil Intelligence. India accounted for 12 per cent of the number (flat steel products comprised 97 per cent of the exports).

The EU’s new 18.3 mt tariff quota includes 12.8 mt for flat steel products, representing a 40 per cent reduction from 2024 import levels.