The EU plans to cut steel import quotas and impose a 50% tariff on out-of-quota shipments, creating a double whammy for Indian steel exporters in 2026. The European Commission aims to reduce tariff-free steel imports to 18.3 million tonnes, a 47% cut from 2024 levels.
The move is designed to protect the EU’s steel industry from global overcapacity and will replace the current safeguard measure expiring in June 2026. Combined with the Carbon Border Adjustment Mechanism (CBAM) starting in January 2026, Indian steel will become less price-competitive in the EU market.
The EU imported 27.4 million tonnes of finished steel in 2024, with India accounting for 12%, mostly flat steel products. The new quota for flat steel is 12.8 million tonnes, a 40% reduction that could sharply cut India’s share. Exporters may be forced to find new markets, leading to higher competition and weaker global prices.
The EU measures could also trigger trade diversion, with Asian steel redirected to India, increasing import competition and pressuring domestic prices. India currently has a 12% safeguard duty on certain steel imports, valid until November 2025, but the industry believes it is too low compared to global tariffs of 30-50%. Industry leaders urge stronger trade protection to shield domestic investments and support India’s long-term industrial goals.
Steel prices have been soft, with hot rolled coil (HRC) prices falling from Rs 51,050 in June to Rs 48,366 per tonne in October 2025. Demand has weakened due to the monsoon and festive slowdown, and major mills have started cutting prices to adjust.