India Seeks Preferential Treatment for Steel Exports Amid EU's New Regulations Negotiations

India is optimistic about obtaining favourable terms for its steel exports to the European Union. The EU is currently in talks with trading partners to establish new steel regulations. Under the India-EU free trade agreement, India has agreed to gradually remove tariffs on most iron and steel products from the EU. However, this agreement does not address India's own steel sector.

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The EU is shifting towards a stricter steel trade framework, replacing existing safeguards. This change is driven by the Steel Overcapacity Regulation, proposed in October 2025, and set to be implemented on July 1, 2026. The EU's new proposals aim to offer preferential treatment to India as a free trade agreement partner, according to Commerce and Industry Minister Piyush Goyal.

EU's New Steel Regulation

The EU's safeguard regime is ending, replaced by a new regulation under the World Trade Organisation's provision. This involves negotiations with partners significantly invested in the EU steel market. An official noted that the quota has decreased by 47%, posing challenges for suppliers. Non-FTA partners will receive smaller quotas compared to FTA partners.

India currently exports approximately four million tonnes of steel to the EU. The high-quality EU steel is essential for India's manufacturing sectors. Minister Goyal expressed confidence that negotiations would eventually lead to a satisfactory resolution for India.

Negotiations at WTO

Discussions will occur at the WTO, where final decisions on quotas will be made. For FTA partners like India, quotas will be less than 47%. The exact figures will depend on ongoing negotiations and finalisation at the WTO.

India holds around a 10% share of the EU's import market in these tariff lines. The goal is to maintain and potentially expand this market share despite the new regulations. An official stated that efforts are being made to preserve and grow India's presence in this sector.

The EU's new steel proposals are part of broader efforts to manage global steel overcapacity issues. These changes reflect a strategic shift in how the EU approaches its trade relationships with key partners like India.

With inputs from PTI