India will be able to export up to 1.6 million metric tons of steel a year to the European Union under the India-EU free trade agreement, with a new preferential quota of 694,853 tons added to an existing 946,616-ton World Trade Organization quota, according to the agreement's legal text available on European Commission website.
The combined quota would cover about 68.4% of India's steel exports to the EU in 2025, compare with 39.4% under the existing quota, Reuters reported Monday. Indian steelmakers are seeking up to 35% higher quotas, while shipments above the agreed limit would face the EU's 50% tariff, according to Reuters.
The preferential quota will not exempt Indian steel from the Carbon Border Adjustment Mechanism of EU, which, according to Reuters, could add costs equivalent to about 35% of the import value once fully phased in.
The additional quota is expected to become available when the trade agreement takes effect, currently expected by year-end, Reuters noted.