The government’s “initial conservative estimates” suggest India’s annual steel exports to the European Union (EU) may stand at 2.8 million tonnes (mt), a commerce ministry official said, adding that New Delhi has secured 1.9 mt under the country-specific quota, with the rest likely to be under the residual quota.

India has been able to secure the quota on the basis of the free trade agreement (FTA) that the two sides concluded in January, the official said. “Even though the FTA is yet to be signed and enforced, the implementation of steel quota commitments has been front-loaded and effective from July 1.”

The EU’s safeguard regime for steel, which came into effect on July 1, provides tariff-rate quotas (TRQs) for shipments. Steel imports within the TRQ attract zero duty in the EU, while imports above the quota are subject to a 50 per cent tariff. The EU’s total annual duty-free steel quota limit stands at 18.3 mt.

India exported 3.8 mt of steel worth $3.4 billion to the EU in 2025-26, according to data available with the Department of Commerce.

Within the EU’s TRQ for steel, there are two categories: country-specific quota and residual quota. Under the country-specific quota, India has secured steel shipments of 1.9 mt, which includes 950,000 tonnes under the FTA partner quota and the rest under the most-favoured nation quota, the official said.

The country-specific quota of 1.9 mt is higher than the 1.64 mt reflected in the text of the FTA released by the EU earlier this month.

There are two sub-quotas under the residual quota as well: a residual quota for FTA partners and a residual quota for others, the official said. Indian exporters can obtain authorisation under the residual quota on a first-come, first-served basis, the official added. However, all steel imports into the EU within the quota would be subject to the Carbon Border Adjustment Mechanism (CBAM).

New Delhi is working with the EU to build domestic capacity for CBAM verification, including recognition of Indian verification agencies. The government is looking at at least 10 agencies, with six applications already submitted, the official said.

“We have asked for faster approvals,” the official said. The aim is to ensure exporters have sufficient domestic verification capacity to provide the emissions documentation required under CBAM, rather than depend on a limited pool of overseas agencies.

India is also working on its Carbon Credit Trading Scheme and discussing carbon pricing with the EU, the official added.