New Delhi

The European Union (EU) has revised safeguard measures on steel imports; and will go back to country-specific quotas giving distinct preference to select nations. This is likely to impact India’s exports to the region. The sub-continent now finds itself downgraded in “other countries” category; and will be considered in a ‘pooled quota’, with some other Asian nations - like China and Vietnam.

The three Asian countries could be given a single limit, thereby putting Indian exporters at a distinct price disadvantage.

Quarterly quotas are in the 12500 ton range (for eac quarter) with the scheme being in force till June 2026.

India is not of the on list of preferred supply nations of the EU – with the latter prioritising select counties like UK, Ukraine, Korea, etc, as per the WTO notification accessed by businessline.

Thus, Indian exporters will end up facing a limited duty-free quota; and any additional sales above this drawing a 25 per cent safeguard duty.

The EU - currently amongst the largest overseas market for steel-makers here, has proposed adjustments to its tariff-rate quotas for certain products, including under the Category 17 - which covers items like angles, shapes, and sections of iron or non-alloy steel - effective July 1.

This adjustment traces to 2022, when Russia’s invasion of Ukraine disrupted steel supplies. This prompted the EU to “globalize” Category 17 quotas. Ukraine, once the region’s largest exporter of these products, saw its market share collapse, creating opportunities for others. India capitalized on this. But the EU’s latest tweak - removing the cap while prioritizing traditional suppliers – will likely reverse those gains.

While the changes aim to balance trade flows with traditional partners like the United Kingdom, Türkiye, and South Korea, they could inadvertently squeeze out emerging exporters like India, which has been steadily increasing its presence in the European market, sources aware said.

“Correcting Act”

The notification to the WTO, earlier this month, outlines a “Correcting Act” that will primarily impact Category 17, a segment that saw its quotas “globalised” in 2022 following Russia’s invasion of Ukraine. This globalisation had merged country-specific quotas for the UK, Turkiye, and Korea with a residual quota, creating a single quota for all origins. A functioning review of the measure had introduced a 15 per cent cap on the share of the overall volume that could be provided by any single exporting country.

In simple terms, the EU is making a shift from this 15 per cent country-specific cap, previously introduced to prevent market crowding, to reinstating country-specific quotas for the UK, Turkiye, and Korea – its key supply partners - alongside an uncapped residual quota for other nations. This restructuring follows a review that found the cap was restricting historical trade flows.

The European Union Imports of iron and steel from India was US$4.25 Billion during 2024, according to the United Nations COMTRADE database on international trade. In 2022, exports from India had peaked to $5.28 bln; which saw a near 20 per cent dip in 2023 to $4.28 bln. Between 2023 and 2024, exports were near flat (in value terms).

The EU had also invited consultations with affected members from June 12 to 19.

Downgrade For India

India, along with countries like China and Vietnam, will share a limited import quota of just 12,555 t (tonnes), beyond which the safeguard . This move effectively relegates India to a “second-tier access regime” without dedicated duty-free quotas, unlike other preferred supplier countries.

“The decision poses a significant challenge for Indian steel exporters, as it risks rapid quota exhaustion due to competition from larger exporters in the pooled category,” market intelligence firm, BigMint said in a recent report.

In Q1, imports of finished products recorded the sharpest increase from China (+42 per cent ), they also surged from South Korea (+28 per cent ), Turkiye (+20 per cent ), and Vietnam (+14 per cent ). In contrast, imports of finished products plunged from India (-56 per cent ), Japan (-39 per cent ), and Taiwan (-3 per cent ), it mentioned.

The main countries of origin for finished steel imports by EU were Turkiye (16.4 per cent share), South Korea (13.5 per cent ), Vietnam (10 per cent ), Taiwan (8.8 per cent ), and China (8.3 per cent ), collectively accounting for 87 per cent of the total.

“The EU is effectively prioritizing certain trade relationship,” BigMint said in its report adding that this ‘second-tier’ treatment, coupled with the ongoing India-EU FTA negotiations, necessitates a robust diplomatic response from India to safeguard its steel exports.

Published on June 22, 2025