India is optimistic about securing preferential treatment for its steel exports to the European Union as the 27-nation bloc negotiates a new steel trade framework with its global partners.
The EU is currently transitioning away from its existing safeguard measures and moving towards a new, more restrictive steel trade regime, prompting concerns among steel-exporting nations, including India.
India-EU FTA Offers Scope for Preferential Treatment
Under the India-EU Free Trade Agreement (FTA), India has committed to phasing out duties on most iron and steel products imported from the EU.
As per the agreement:
- 6.1% of tariff lines or product categories, accounting for 6% of India’s exports to the EU, will receive preferential access.
- This access will be provided through tariff reductions (for items such as poultry and bakery products) or tariff rate quotas (TRQs) for sensitive goods, including cars and steel.
EU’s New Steel Overcapacity Regulation
The European Union is preparing to roll out a Steel Overcapacity Regulation, formally proposed in October 2025, which is scheduled to come into force on July 1, 2026.
This regulation is intended to replace existing safeguards and curb steel imports amid concerns over global overcapacity.
India Engaging EU in Good Faith: Piyush Goyal
Commerce and Industry Minister Piyush Goyal said India is engaging constructively with the EU to ensure it receives better terms than non-FTA countries.
“The European Union has come in with a new set of proposals on steel, and we have agreed in good faith to work together towards a very preferential treatment as a free trade agreement partner so that India gets a better deal than most other countries with whom the EU does not have an FTA,” Goyal said on Tuesday.
He added that India is hopeful the issue will be resolved satisfactorily over time.
Quota Cuts Pose Challenge for Steel Exporters
An official familiar with the negotiations said the EU’s existing safeguard regime is ending and will be replaced by the new regulation under World Trade Organisation (WTO) provisions.
Under the proposed framework:
- Steel quotas are set to be cut by 47%, a move that will impact all suppliers.
- Negotiations with trading partners will take place at the WTO, particularly with countries that have a substantial interest in the EU steel market.
“This reduction will be difficult for every supplier to meet,” the official said.
FTA Partners Likely to Get Better Quotas
However, India believes its FTA status will offer a competitive advantage.
“What we have tried to push is that non-FTA partners will receive a smaller quota compared to FTA partners,” the official said.
“For FTA partners, the reduction will be less than 47%. Where it finally settles will depend on negotiations and finalisation at the WTO,” the official added.
India Aims to Preserve and Grow Market Share
India currently exports around four million tonnes of steel to the EU, holding roughly 10% of the EU’s import basket in the relevant tariff lines.
Officials said the goal is not only to protect this position but also to expand India’s presence in the EU steel market.
“What we will be able to ensure is that we more or less preserve our market and grow our market in this sector,” the official said.
The EU remains a crucial destination for Indian steel, while high-quality EU steel imports are also essential for India’s manufacturing ecosystem.