Big impact on India's steel exports? EU begins review of safeguards measures

New Delhi: The European Union (EU) has initiated a review of safeguard measures that currently apply to certain steel imports into the region, a move that could impact India's steel exports.

The safeguard measure is in the form of an import quota wherein products imported within the assigned quota enter the EU market at zero tariffs or lower tariffs. Once the quota is exceeded, a tariff is imposed on the product, which in the case of steel is 25%. Indian steel exports to the EU range between 15% and 40% of its total steel exports, with the former representing the lowest value and the latter representing the peak value.

Further, Italy and Belgium are the biggest markets for Indian steel exporters with 22.3% and 11.2% of India's finished steel exports landing in the former and latter markets in FY24.


The total value of steel exports to the EU in the previous financial year was ₹29,534 crore.

"EU steel prices are attractive for steel producers as they are higher than other markets, and if the quota is revised downwards, it will impact the Indian steel exports to the EU," said Ritabrata Ghosh, vice president & sector head-corporate ratings, Investment Information and Credit Rating Agency (ICRA) Limited.

The slackening demand for the metal in the EU along with China's surging steel exports to major regions, which has led to steel being directed to the EU, have emerged as primary reasons for this move. "The contraction in Union demand for steel, resulting in widening gaps with the current level of duty-free quota volumes. Moreover, China's steel export surges to major regions have pushed exports from other markets to the EU," said the EU notification on review of the safeguard measures.

It is also estimated that China's steel export by volume in CY2024 is likely to beat its previous high, which was registered in CY2015.

The main reason driving China's steel exports is its faltering real estate sector, which has weakened the domestic demand for steel in the country. "China in CY2015 exported 112 million tonnes (mt) steel and it looks like Chinese steel exports will likely exceed the 112 mt in CY2024 although only by a bit," added Ghosh.