INDIA-EU TRADE VERTICAL FACTSHEET

IRON, STEEL AND BASE METALS

This factsheet covers India-EU trade in iron, steel, aluminium, copper, and other base metals and metal products — one of the most strategically significant verticals in bilateral trade given CBAM, EU anti-dumping measures, and the green transition. It covers products, market data, regulatory constraints, and commercial opportunities.

1. Market Overview

2. Key Products and HS Codes

3. EU Regulatory and Trade Defence Framework

3.1 EU Steel Safeguard Measures

EU Implementing Regulation (EU) 2019/159 (and renewals) imposes tariff rate quotas (TRQs) on steel product imports from all WTO members. Imports within the TRQ enter at the standard MFN duty rate; imports above the TRQ attract an additional 25% safeguard duty. Key operational points:

TRQ utilisation is tracked quarterly. Once a TRQ is exhausted for a quarter, all subsequent imports in that product category pay the 25% safeguard duty.

Country-specific TRQs exist for the largest exporters in each category. India has country-specific TRQs in some categories — these typically refill quarterly on 1 January, 1 April, 1 July, and 1 October.

If India's country-specific TRQ is exhausted, Indian exports fall into the residual global TRQ — which may also be exhausted early in periods of high global steel demand.

TRQ utilisation data is published by the European Commission — Indian steel exporters must monitor this data before booking cargo or committing to EU buyer contracts.

The EU steel safeguard is currently in force until 30 June 2026. Extensions are expected given continued global steel overcapacity.

3.2 EU Anti-Dumping Duties on Indian Steel

EU ADD applies to specific steel products from India — see Doc 54 for the full current measures list. Key points:

ADD is charged in addition to the standard MFN duty and the safeguard duty (if above TRQ). Total duty burden can be substantial.

Individual exporter-specific ADD rates are set following investigations. Exporters that did not participate in the original investigation face the "all others" rate — typically the highest rate. New exporters should apply for a new exporter review.

ADD rates are reviewed in expiry reviews (typically after 5 years). Indian steel companies should monitor expiry review timelines and file submissions.

3.3 CBAM — Carbon Border Adjustment Mechanism

CBAM applies to iron, steel, and aluminium imports into the EU from 2026 (with transitional reporting from October 2023 — see Doc 56). Key implications for Indian steel and aluminium:

Coal-based steel production: Indian blast furnace / basic oxygen furnace (BF-BOF) steel has embedded emissions of approximately 2.0–2.5 tCO2e per tonne — at EUR 60/tCO2 EU ETS price, CBAM cost = EUR 120–150 per tonne of steel. This is a significant additional cost that Indian steel exporters must factor into EU pricing.

Coal-based aluminium: Indian thermal coal-powered aluminium smelting has embedded emissions of approximately 12–16 tCO2e per tonne of primary aluminium — at EUR 60/tCO2, CBAM cost = EUR 720–960 per tonne. This is extremely significant and threatens the commercial viability of Indian coal-based aluminium exports to the EU without decarbonisation.

Green steel and green aluminium: Indian producers investing in green hydrogen-based DRI (direct reduced iron) steel production or renewable-powered aluminium smelting will have near-zero CBAM costs — a major strategic advantage.

CBAM monitoring action: Indian steel and aluminium exporters should begin monitoring and reporting their embedded emissions now (transitional phase) to establish accurate baselines before the financial obligation begins in 2026.

3.4 EU Scrap Steel and Circular Economy

The EU circular economy agenda is reshaping steel demand. Electric arc furnace (EAF) steel — produced from scrap using renewable electricity — has near-zero CBAM cost and is the EU's preferred decarbonisation pathway for steel. Indian EAF steel producers using renewable electricity are strategically well-positioned for the EU's green steel future. India's EAF share of steel production is approximately 50% (vs. EU's growing EAF share) — positioning India as a potential supplier of low-carbon EAF steel to the EU.

4. Commercial Opportunities — Where India Is Competitive

4.1 High Opportunity (Low ADD / Low CBAM Risk)

Iron and steel castings (HS 7325, 7326): No EU ADD. CBAM applicable but castings are a small percentage of total steel. India (Rajkot, Coimbatore, Pune) produces high-quality automotive and industrial castings at 25–40% below European casting prices. Strong EU demand from automotive, pumps, valves, and wind energy.

Steel forgings (HS 7228): No EU ADD. CBAM applicable. India (Pune, Rajkot) is among the world's best forging producers. Crankshafts, connecting rods, flanges, and rings for European automotive and industrial applications.

Seamless pipes for oil/gas (HS 7304): Verify current ADD status. High-value niche. Indian producers (Maharashtra Seamless, ISMT) supply to European energy companies.

Stainless steel bars and rods for precision engineering (HS 7222): ADD applies but individual rates vary. High value-added applications in food equipment, medical, and chemical processing.

4.2 Moderate Opportunity (Monitor TRQ and ADD)

Wire rod (HS 7213): EU safeguard TRQ applies. India competitive on pricing. Monitor TRQ utilisation closely before contracting.

Structural sections (HS 7216): EU safeguard TRQ. EU construction market demand is robust. Price-competitive.

Aluminium extrusions (HS 7604): CBAM from 2026. If Indian producer can demonstrate lower embedded emissions (hydro-powered smelting), CBAM cost is reduced. Growing EU construction and automotive demand.

4.3 Challenging (High ADD / High CBAM)

HRC, CRFP, coated flat steel: EU safeguard TRQ + potential ADD + CBAM from 2026. Total cost burden is significant. Only competitive if Indian pricing advantage exceeds the combined duty and carbon cost — this must be calculated product-by-product.

Primary aluminium (coal-based): CBAM cost from 2026 at typical Indian embedded emissions levels makes coal-based primary aluminium exports to the EU commercially very difficult without decarbonisation investment.

5. Trade Facilitation Opportunities

Castings and forgings mandates: Connecting Indian casting and forging clusters (Rajkot, Coimbatore, Pune) with European automotive OEMs, wind energy manufacturers, pump and valve companies. This is the single highest-opportunity sub-segment in the metals vertical — no ADD, no specific CBAM problem for castings, strong EU demand, and India's price and quality advantage is substantial.

Green steel supply mandates: As EU demand for low-carbon steel grows, connecting Indian EAF producers (Tata Steel's EAF route, JSW's green steel initiatives, AMNS India) with EU steel service centres and OEMs with green steel procurement commitments.

Stainless steel precision products: Connecting Indian stainless steel bar and rod producers with European precision engineering and food equipment manufacturers.

CBAM advisory: Facilitating CBAM embedded carbon data collection and reporting for Indian metal exporters — a new compliance advisory service that EU buyers will increasingly demand from Indian suppliers.

6. Key Bodies and References

Doc 72 — India-EU Trade Vertical Factsheet: Iron, Steel and Base Metals — Neutral Template