India to get 6.94 lakh tonnes steel export quota under EU free trade pact

New Delhi: India will get country-specific tariff-rate quotas (TRQs) of 1.64 million tonnes annually to export steel products to the EU. Under the country-specific quotas, India gets 946,616 tonne under the Most Favoured Nation (MFN) component and 694,853 tonne under the FTA component.

The quotas cover stainless steel products, pipes and tubes, non-alloy and alloy hot-rolled sheets and strips, metallic-coated sheets, and cold-rolled sheets, among others. The rest of the 940,000 tonnes are under the most favoured nation (MFN) component.

The two sides concluded the talks for an FTA in January, which is expected to be signed later this year and come into force the first quarter of next year.

The European Commission Friday formally submitted its proposal to the European Council to sign and finalise the FTA with India, marking a major step towards implementing the "mother of all deals". At present, India exports about four million tonnes of steel annually to the EU.

As per the text, the largest country-specific quota is for non-alloy and other alloy hot-rolled sheets and strips at 5.09 lakh tonnes, followed by cold-rolled sheets with a total quota of 2.18 lakh tonnes and metallic-coated sheets with 1.97 lakh tonnes. It added that the TRQs relating to imports into the EU of steel products originating in India shall take effect on the date the EU Steel Regulation starts applying. The TRQs follow the EU's Steel Overcapacity Regulation, which came into force on July 1 this year which aims at ensuring protection for the bloc's steel industry against the effects of global overcapacity. It sets free-of-duty quotas at 18.3 million tonnes, with a 50% duty for out-of-quota imports and a melt-and-pour regime to enhance transparency.

Steel imports from India outside these quotas will attract the applicable base-rate duties under the EU's tariff commitments. "If the European Union amends the Product Specific Rules (PSRs) for products covered under the EU Steel Regulation, the European Union shall consult with India immediately upon the proposal for such an amendment," the text said. The EU would administer the TRQs, it said, in a transparent, objective and non-discriminatory manner so as to be conducive to trade and facilitate, to the extent feasible, their effective utilisation.

This includes making publicly available in a timely and continuous manner all relevant information concerning the administration of those TRQs.

It added that India will also get access to additional quota volumes in categories where India has a country-specific quota. Those additional volumes will be allocated through competition among EU FTA partners that have country-specific quotas in those categories. 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.

The agreement also provides for periodic reviews of the quotas, with the first review to be initiated one year after the FTA comes into force and subsequent reviews every five years.