India to Get Additional 0.9 Million Tonnes of Steel Quota Under EU Residual Category

India will get country-specific tariff-rate quotas (TRQs) totalling 1.64 million tonnes annually for exporting steel products to the European Union, while the government expects exporters to secure another 0.9 million tonnes through residual quotas, an official said.

Taking into account the estimated 0.9 million tonnes, India expects to have a total quota of 2.5 million tonnes, the official said.

As per the text of the India-EU free trade agreement, the total country-specific quota of 16,41,470 tonnes comprises 9,46,616 tonnes under the MFN (most favoured nation) component and 6,94,853 tonnes under the FTA component.

"Over and above that (1.6 million tons), there are residual category quotas. There are three residual categories, and in two only FTA countries can compete. So that potential is there with our exporters," the government official said. The residual quota works on the 'first come, first served' principle, and that is also a good amount.

"Based on India's past performances, we have estimated that at least, on a conservative side, we should be able to avail another 0.9 million tonnes," the official added.

Because of the trade pact, Indian exporters will be able to compete for that 0.9 million tonnes. The quotas cover a wide range of steel products, including non-alloy and alloy hot-rolled sheets and strips, cold-rolled sheets, metallic-coated sheets, organic-coated sheets, tin mill products, stainless steel products, merchant bars and light sections, rebars, wire rods, pipes and tubes.

India at present exports about 3-4 million tonnes of steel per year to the EU. The TRQs follow the European Union's Steel Overcapacity Regulation, which came into force on July 1 this year. It is aimed at ensuring protection for the EU's steel industry against the effects of global overcapacity. It sets free-of-duty quotas at 18.3 million tonnes, with a 50 per cent duty for out-of-quota imports and a melt-and-pour regime to enhance transparency.

As per the text, for product categories where India does not have a country-specific quota, it will have access to residual quotas, including general residual quotas open to eligible trading partners and preferential quotas reserved for EU FTA partners.

India and the EU announced the conclusion of negotiations for the pact on January 27. It is expected to be signed by the end of this year and likely to be implemented next year.