India has secured significant concessions in its steel, fisheries, and shipping sectors from the European Union. This development comes as both parties prepare to finalize what has been termed the ‘mother of all Free Trade Agreements’ (FTA) by December, with plans to operationalize it early next year, according to a senior official from India’s commerce ministry.
Some concessions under the yet-to-be-signed India-EU free trade agreement (FTA) have already taken effect, including an increased quota for Indian steel exports to the EU, the official said, requesting anonymity. The UK has already recognized India’s carbon credit trading scheme to resolve British Carbon Border Adjustment Mechanism (CBAM) or carbon tax on Indian exports of goods like steel, aluminium and cement. The EU’s CBAM, or carbon tax, is a horizontal regulation applicable to all its trading partners. The import duty on select carbon-intensive goods is levied based on their greenhouse gas emissions to offset carbon leakage. Carbon leakage occurs when EU firms import carbon-intensive products from countries with less stringent climate policies.
The Council is likely to approve it soon and by December 2026 both countries may sign it, he said. The deal is expected to be operational by early 2027 after approval of the EU Parliament, he said.
The legal scrubbing of draft India-EU FTA was completed in record time and the same is now referred to the European Council, according to the officials. The FTA negotiations are also helping India align its carbon measurement and reporting practices with the EU system, according to the officials. Experts said this would also set a precedence for the EU’s CBAM.
The EU has imposed a quota system on steel imports from all countries as part of measures to address overcapacity and protect its domestic industry. “Certain concessions and commitments have been frontloaded soon after conclusion of the FTA negotiations. Under the system, the EU sets a duty-free quota of 18.3 million tonnes (mt) and imposes a 50% duty on out-of-quota imports. Indian steel importers are availing duty free quota from July 1, the official said. India’s steel export to the EU is one of them, which is effective from July 1,” he said. New Delhi secured a quota of about 2.8 mt Indian steel exports to the EU, he said. The quantity is over 93% of 3 mt average annual supplies of Indian steel to the bloc.
