India has secured a 2.8 million tonne annual steel export quota to the EU, covering over 80% of its current shipments. The quota is duty-free, but the Carbon Border Adjustment Mechanism (CBAM) will still apply, potentially adding a 35% carbon charge. This means Indian exporters get market access but face new compliance costs. The EU's Steel Overcapacity Regulation set these quotas to protect its domestic industry. For India, the real challenge is CBAM, which requires tracking and reporting emissions. Steelmakers will need to invest in cleaner production methods, such as green hydrogen or electric arc furnaces, to avoid the full penalty and stay competitive in the EU market. The quota is a trade win, but the carbon charge is the long-term factor that could reshape Indian steel exports. Companies that decarbonize early will have an edge, while others may see margins shrink as CBAM phases in.
