India’s proposed EU steel quota would provide a longer-term, country-specific base of access across 16 product categories, but at a lower aggregate volume than under the EU’s operating 2026 interim regime. Draft Annex 2-B of the EU–India free trade agreement sets out approximately 1.641Mt/year, comprising 946,616 tonnes under the MFN component and 694,853 tonnes under the preferential FTA component. This is approximately 302,000 tonnes, or 15.5%, below the 1.944 Mt annualised from the 971,763 tonnes allocated across India’s product-specific quotas for July–December 2026.
The proposed distribution broadly reflects India’s historical export mix to the EU, but its fixed volume covers only 53.6% of average mapped trade during 2022–2024. With the agreement not yet binding, its principal value lies in providing greater long-term certainty over product-specific access as the EU tightens its steel import framework, not in delivering an immediate expansion over the quotas operating today.
Measured against India’s established trade with Europe, that access would remain restrictive. Eurostat data mapped to the product codes in the FTA annex show that EU-27 imports from India averaged 3.064Mt in 2022–2024, meaning the proposed fixed allocation would cover 53.6% of the historical flow. Coverage across the principal flat-steel categories clusters consistently around 50–55%, indicating that the allocation broadly reflects India’s actual export mix rather than favouring one product simply because it receives a larger tonnage. But the same comparison exposes the central constraint: even with the FTA, roughly half of India’s recent trade would remain dependent on competitive or residual quota pools—or face the EU’s 50% out-of-quota duty—while CBAM costs would continue to apply. The agreement would make access more predictable; it would not make it unrestricted.
From the safeguard to the proposed FTA quotas
The EU introduced its steel safeguard provisionally in July 2018 and made it definitive in early 2019. The system combined product-specific tariff-rate quotas with a 25% duty on volumes exceeding the quota, and it remained in place until June 30, 2026.
From July 1 2026, the safeguard was replaced by the EU’s new steel import regime under Regulation (EU) 2026/1384. That framework provides 18.3Mt of annual duty-free quota across covered steel products and applies a 50% duty to out-of-quota imports. A separate implementing schedule established country- and product-specific quantities for the second half of 2026, including a quarterly Indian quota of 149,318.61tonnes for Category 1.A hot-rolled flat products.
The FTA annex is the next proposed layer in this evolving structure. It contains a 1,641,469-tonne fixed country-specific schedule, of which 694,853 tonnes is identified as preferential FTA quota. This answers the first question facing the market: the negotiated text does provide for new preferential quotas. But “additional” should not be misread as automatically cumulative with every quota operating under the present interim regime. The 694,853-tonne preferential component sits within the proposed 1.641Mt FTA schedule; it should not simply be added to the current post-July 2026 allocations to manufacture a larger entitlement.
Exporters and importers await the operating rules
Indian mills, traders and European buyers contacted in SMM’s market checks are awaiting clarity on when the FTA schedule will enter into force and how the EU will implement it within the post-safeguard system. The outstanding commercial questions include the first applicable quota period, quarterly phasing, carry-over and return rules, treatment of residual quotas, customs order numbers, and the documentation needed to prove Indian origin.
These details will determine whether the headline quota is usable in practice. A yearly allocation can still produce congestion if it is released quarterly and front-loaded by importers. Conversely, access to a residual pool can increase actual shipments beyond the fixed country allocation, but only if capacity remains available when Indian cargoes are presented to customs.
The legal status also matters. The European Commission says the published FTA text is for information, may undergo further legal revision and becomes binding only after signature and completion of the necessary internal procedures. Until those steps are completed and an implementing mechanism is published, the market has a negotiated schedule—not a confirmed start date or a settled customs process.
The fixed quota covers 53.6% of the recent mapped trade base
SMM mapped the CN8 product lines in proposed Annex 2-B to Eurostat Comext data for EU-27 imports from India. On that like-for-like basis, covered imports were 2.668Mt in 2022, 3.063Mt in 2023, 3.461Mt in 2024 and 2.649Mt in 2025. The average for 2022–2024 was 3.064Mt.
The proposed 1.641Mt fixed allocation therefore equals 53.6% of the 2022–2024 average and 62.0% of the lower 2025 volume. These are the relevant coverage ratios for the products actually listed in the annex. A broader estimate of roughly 2.5Mt of potential access assumes that Indian suppliers also capture around 0.9Mt from residual quotas open to multiple origins. That residual volume is a market opportunity, not an India-specific entitlement, and should not be included when measuring guaranteed fixed access.
The comparison also shows why a single recent year can give a distorted impression. India’s HRC trade fell sharply in 2025, making the proposed HRC quota appear larger than that year’s shipments. Against a multi-year baseline, however, the quota covers only about half the historical flow.
Product allocation follows the shape of historical exports
Hot-rolled sheets and strips receive the largest proposed allocation at 509,605 tonnes. India’s average EU exports in this category were 964,506 tonnes in 2022–2024, giving fixed-quota coverage of 52.8%.
The same relationship appears across the other large categories. Metallic-coated sheets receive a combined 283,016 tonnes against average historical imports of 513,635 tonnes, or 55.1%. Cold-rolled sheets receive 218,658 tonnes against 406,660 tonnes, or 53.8%. Quarto plate receives 181,835 tonnes against 363,426 tonnes, exactly 50.0%. Organic-coated sheets receive 186,038 tonnes against 358,922 tonnes, or 51.8%.
This clustering is commercially significant. The absolute tonnages are differ widely, but the quota-to-trade ratios for the main lines are not. HRC receives the largest quota because it has historically been India’s largest steel flow into the EU; coated material, CRC and plate follow according to their realised trade. The structure does not support the conclusion that one major product has been arbitrarily favoured simply because its allocation is larger in tonnes.
Some smaller lines have higher coverage ratios. Tin mill products receive 37,541 tonnes against a 2022–2024 average of 47,978 tonnes, or 78.2%. Stainless cold-rolled products receive 31,208tonnes against 47,847 tonnes, or 65.2%, while stainless hot-rolled quarto plate receives 4,880 tonnes against 7,216tonnes, or 67.6%. Their smaller absolute size means they do not materially change the overall result, but they show that the schedule is not a mechanical 50% formula for every category.
For metallic-coated products, Categories 4.A and 4.B have been combined in SMM’s trade comparison. The legal annex separates some lines at the ten-digit TARIC level, while public Eurostat trade data are available at CN8. Combining and deduplicating the categories avoids overstating historical trade and avoids false product-level precision.
HRC explains most of the volatility in the trade series
India’s mapped steel exports to the EU rose from 2.668Mt in 2022 to 3.461Mt in 2024, before falling 23.46% to 2.649Mt in 2025. HRC drove much of that swing. EU imports of Indian HRC increased from 658,720 tonnes in 2022 to 1.063Mt in 2023 and 1.172Mt in 2024, then dropped 62% to 445,189 tonnes in 2025. In January–July 2026, imports had already reached 520,318 tonnes, although the seven-month number should not be annualised mechanically because shipment and customs-clearance timing can be uneven.
Other products followed less extreme paths. CRC imports were 404,341 tonnes in 2022, 384,067 tonnes in 2023, 431,573 tonnes in 2024 and 478,152 tonnes in 2025. Metallic-coated volumes rose from 385,097 tonnes in 2022 to almost 600,000 tonnes in 2024 before easing to 459,673 tonnes in 2025. Organic-coated sheet moved between 307,634 tonnes and 389,368 tonnes during 2022–2025, while quarto plate ranged between 330,616 tonnes and 414,892 tonnes.
This history is the correct context for evaluating the proposed quota split. The quotas do not need to be equal across products; they need to be assessed against the flow each product has historically generated and the demand it can realistically serve. The larger question is whether a fixed allocation covering roughly half of recent trade will be sufficient once residual access, CBAM costs and European price conditions are taken into account.
Official quota utilisation and the physical cargo pipeline
The European Commission’s live tariff-quota database provides the authoritative customs position. At the database update of September 24, 2026, India’s Category 1.A HRC quota for July 1–September 30, order number 09.9803, retained an initial allocation of 149,318.61tonnes and a balance of 2,991.01tonnes. Of the available volume, 146,327.60 tonnes, or 98.0%, had been drawn.
The quota was classified as critical but remained open for drawing requests, with no exhaustion date recorded. The correct official description was therefore “nearly exhausted,” not “exhausted.” Market participants may regard the residual tonnage as effectively unavailable because cargoes or customs declarations may not yet be reflected in accepted quota drawings. However, that remains a commercial assessment and should be attributed as such rather than presented as the EU customs position.
The Commission database also lists a fresh 149,318.61-tonne allocation for October 1–December 31, 2026. The pace at which this volume is drawn will be more consequential for near-term trading than the proposed annual FTA allocation because the FTA quota schedule has not yet entered into force.
SMM tracking identified 39,279.378 tonnes of HRC shipped from Dhamra in August on a vessel that subsequently made a confirmed port call at Ravenna. A further 39,179 tonnes of coils and plate departed Paradip on September 7 with Ravenna declared as its destination. The final outturn for the Paradip cargo was not published, although port records had confirmed at least 35,124 tonnes loaded before sailing. Together, the two east-coast movements represent 78,458.378 tonnes on named Ravenna voyages, with a minimum evidenced loaded volume of 74,403.378 tonnes.
A separate 64,600-tonne coil-and-plate cargo loaded across Paradip and Krishnapatnam transited the Suez Canal and reached Port Said, with a probable Mediterranean or European destination.
These shipping figures describe physical cargo movements and routing, not accepted quota claims. They cannot be translated directly into Category 1.A utilisation because product classification, final discharge, customs-entry timing and quota treatment differ by shipment.
Offers rose much faster than confirmed transaction evidence
The quota debate has coincided with a rapid repricing of Indian HRC offers to Europe. In mid-August, SMM assessed Indian HRC for Europe at 510–520USD/tonne FOB India and 630–650USD/tonne CFR Europe. By September 11, indications had moved to 590–600USD/tonne FOB India and 695–700USD/tonne CFR Europe. A level of 715USD/tonne CFR was discussed, but SMM had not confirmed a transaction at that price.
By September 23, market indications were around 650USD/tonne FOB India, while offers into northern Europe were discussed at 730USD/tonne CFR. Export sales remained subdued and no fresh transaction was confirmed at the upper indications. The move therefore represents a clear reset in sellers’ asking levels, but not yet equivalent evidence that buyers were clearing the market at those levels.
Indian domestic HRC was assessed around 64,000INR/tonne ex-yard Mumbai, excluding GST, on 16 September, equivalent to roughly 667USD/tonne at the contemporaneous conversion used in SMM’s daily report. That domestic number should not be compared directly with FOB or CFR export indications as a margin. A valid netback requires normalisation for freight, port and handling costs, financing, product specification, payment terms, quota risk and CBAM exposure.
Quota scarcity can support firmer offers by reducing the volume that can enter Europe without the out-of-quota duty. It does not, on its own, establish a transactable price. For European buyers, the relevant delivered cost is the customs-cleared, CBAM-adjusted landed value; for Indian mills, the relevant comparison is the net export realisation after all route and compliance costs.
The FTA improves certainty, but it does not create unrestricted access
The proposed schedule would give Indian suppliers a clearer fixed country allocation across a broad range of steel products. That has value because it reduces dependence on shared residual pools and gives mills and buyers a better base for annual planning. Yet the fixed allocation covers only a little more than half of the 2022–2024 mapped trade average, so continued access to residual quotas and careful shipment timing would still matter.
For HRC specifically, the 509,605-tonne proposed FTA line should not be marketed as a simple increase from the current operating regime. The present interim HRC schedule is 149,318.61 tonnes a quarter, equivalent to 597,274.44 tonnes on a four-quarter basis. The FTA figure is 87,669 tonnes lower than that annualised reference. This is a comparison between different legal regimes, not evidence of an implemented quota cut, but it reinforces why exporters and importers are waiting for the final operating rules rather than trading solely from the headline number.
CBAM is the other major constraint. Steel entering within quota may avoid an out-of-quota customs duty, but it remains subject to the EU’s carbon-border framework. The commercial benefit of preferential access will therefore vary by mill, production route, verified embedded emissions and the cost of CBAM compliance. A quota slot can preserve market access; it cannot guarantee a competitive landed price.
Market conclusion
The proposed 1.641Mt schedule is best understood as a structured base of country-specific access rather than an open channel for India’s historical EU trade. Its product distribution broadly mirrors the actual bilateral trade mix: for the major categories, the fixed quota generally covers around half of the 2022–2024 average flow. That is the economically relevant comparison, not whether every product receives the same tonnage.
The immediate market, however, is still being governed by the current quarterly system. India’s July–September HRC quota was 98.0% utilised at the latest official update, a physical pipeline remained in transit or bond, and offer levels had risen sharply without equivalent confirmation in concluded deals. The FTA can improve planning certainty once implemented, but its real value will depend on the entry-into-force date, quarterly administration, residual access, rules of origin, CBAM-adjusted economics and the pace of European demand.
Until those variables are settled, the defensible conclusion is precise: India has a negotiated fixed quota schedule that broadly reflects its historical product flows, but the market does not yet have an operational 1.641Mt entitlement.
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