Daijiworld Media Network - New Delhi
New Delhi, Sep 17: India has secured a country-specific tariff-rate quota (TRQ) of 1.9 million tonnes (MT) annually for steel exports to the European Union (EU), while the government expects exporters to secure another 0.9 MT through residual quotas, taking the total to 2.8 MT, a Commerce Ministry official said on Thursday.
With this, India has secured quota access covering more than 80 per cent of its steel exports to the EU. India exported around 3 MT of steel products to the European bloc during the last financial year.
The tariff-rate quotas follow the European Union's Steel Overcapacity Regulation, which came into force on July 1. The regulation aims to protect the EU's steel industry from the impact of global overcapacity. It provides for duty-free quotas of 18.3 MT, while imports beyond the quota attract a 50 per cent duty.
Indian exporters have already started using the quota and shipping steel to the 27-member bloc. The official said the free trade agreement benefits for the steel sector had been frontloaded.
Exports within the available quota will attract zero duty, while shipments beyond the quota will face a 50 per cent tariff.
However, duty-free access does not mean cost-free entry. The European Union's Carbon Border Adjustment Mechanism (CBAM) will apply to Indian steel both within and outside the quota.
According to estimates by the Global Trade Research Initiative (GTRI), the carbon charge could average around 35 per cent when the mechanism is fully phased in.
The quotas cover a wide range of steel products, including non-alloy and alloy hot-rolled sheets and strips, cold-rolled sheets, metallic-coated and organic-coated sheets, tin mill products, stainless steel products, merchant bars and light sections, rebars, wire rods, pipes and tubes.
For product categories where India does not have a country-specific quota, exporters can access residual quotas, including general residual quotas open to eligible trading partners and preferential quotas reserved for EU free trade agreement partners.
India and the EU announced the conclusion of negotiations for their trade pact on January 27. The agreement is expected to be signed by the end of this year and is likely to be implemented next year.