The India-EU Trade and Economic Partnership Agreement (TEPA) is being pitched as a cushion for Indian steel exporters facing EU tariffs and the Carbon Border Adjustment Mechanism (CBAM). Commerce Ministry officials say over 80 percent of current exports would stay protected, with a tariff rate quota of 1.6 million tonnes already in effect and room for more than 2.5 million tonnes under MFN and other categories. Six foreign agencies have also applied to act as carbon verifiers for Indian firms, a step toward CBAM compliance. Industry sources are less optimistic. They point to a potential mismatch between the FTA's Annex 2-B quota rules and the EU's Implementing Regulation 2026/1457, which could reduce guaranteed country-specific access across 16 steel product categories. There is also concern that importers might face a 50 percent tariff when quantities exceed quota under Annex 2-B, even if they are within the implementing regulation's limits. The industry wants the European Commission to revise the quantified shortfall before ratification. The core tension is that market access and carbon compliance are now tied together. The written EU assurance on extending any CBAM relaxation to India is helpful, but the industry is right to ask for concrete numbers and clear rules. The outcome will shape how Indian steel competes in Europe and whether the FTA actually delivers the relief it claims.
