India gains wider EU steel access, but carbon levy remains
India has secured an increased quota for steel exports to the European Union under a new free trade agreement. However, exporters will still be subject to the EU's Carbon Border Adjustment Mechanism, which imposes significant carbon-related costs on imports.
Why it matters
This reflects the tension between expanding international trade access and the implementation of stringent environmental regulations on industrial goods.
India will be able to export up to 1.64 million metric tons of steel a year to the European Union (EU) under a free trade agreement, but exporters will still face carbon-related costs, according to the legal text of the pact.
The agreement provides India with an additional preferential quota of 694,853 tons of steel, on top of an existing 946,616 ton WTO quota.
The combined quota is equivalent to about 68.4% of India’s 2.4 million tons of steel exports to the EU in 2025, up from 39.4% under the existing quota.
Steel shipments above the quota will be subject to the EU’s 50% tariff, according to a Global Trade Research Initiative (GTRI) analysis of the legal text of the agreement, which was released on Friday (September 11, 2026) and could still be revised.
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