The UK and the European Union have introduced revised steel import quotas aimed at curbing state-subsidised steel inflow and boosting domestic production capacity. According to reports from Financial Express, these new trade measures came into force on July 1, replacing the steel safeguard mechanism that expired on June 30. The EU has reduced its overall duty-free steel import quota by 47% to 18.3 million tonnes, with 50% of this allocation reserved for countries with free trade agreements with the bloc. While both markets have tightened overall duty-free steel imports, countries covered by free trade agreements have received preferential treatment under the new framework. The UK's measures, first announced in March, initially proposed a 60% reduction in duty-free steel imports, but following negotiations, the final cut has been revised to 51%. As reported by EU Trade Commissioner Maroš Šefčovič, the EU is providing market participants with predictability through clear and transparent quota distribution rules while applying a fair and objective methodology.
India has secured approximately 2 million tonnes of quota across 16 steel products under the revised EU framework, representing the largest allocation among the EU's FTA partners. As reported by Financial Express, this allocation is close to India's actual exports of about 2.2 million tonnes to the EU during 2025-26. The European bloc remains India's biggest overseas steel market, accounting for 34.4% of the country's total steel exports of 6.6 million tonnes. India's steel quota in the UK has been set at 1.67 lakh tonnes, while current exports to the British market stand at about 1.37 lakh tonnes. Under the revised arrangement, India has secured around 2 million tonnes of quota across 16 steel products, compared with exports of about 2.2 million tonnes to the EU during 2025-26. According to EU Trade Commissioner Maroš Šefčovič, many countries that have clinched a trade deal with the EU will be allocated country-specific quotas proportionate to the volumes traded with the EU between 2022 and 2024.
The UK has modified its steel import regime following discussions with India, with the final cut revised to 51% from the initial proposal of 60% reduction in duty-free steel imports. According to Financial Express, Britain has fixed its global duty-free steel quota at 3.2 million tonnes annually, marking a 21% increase over the earlier provisional cap of 2.66 million tonnes. India's quota for hot rolled coil has been increased by 169% to 33,456 tonnes from the earlier proposal of 12,405 tonnes, while the quota for metallic coated sheets remains unchanged at 1.25 lakh tonnes. The revised framework also provides greater room for Indian exports in certain product categories, with the UK's initial proposal announced in March envisaging a 60% reduction in duty-free steel imports. When the provisional quotas were announced, India had objected as it came after both countries had concluded their free trade agreement, which also delayed the implementation of CETA.
The new UK steel trade measure, implemented from July 1, 2026, operates through a quarterly allocation system with specific quotas for each quarter. As detailed in the government's implementation guidelines, quarter 1 (July-September) receives 238,380 tonnes, quarter 2 (October-December) gets 238,380 tonnes, quarter 3 (January-March) has 233,197 tonnes, and quarter 4 (April-June) allocates 235,787 tonnes. For the European Union, the total annual quota is 595,950 tonnes, distributed across all quarters. India's quota allocation of 33,456 tonnes falls under category 1, while the residual quota of 49,763 tonnes is available on a first-come, first-served basis. Any imports above these levels will face a 50% tariff, calculated on the price of goods before other import duties. The measure applies to steel products that can be manufactured in the UK, with unused quarterly quotas rolling over to the next quarter but not to the next quota year.
The quota revisions come after India raised concerns over the UK's initial proposal, arguing that the restrictions were inconsistent with the spirit of the Comprehensive Economic and Trade Agreement (CETA). As reported by Financial Express, the issue prompted several rounds of discussions involving ministers and senior officials before both sides reached an understanding on June 17. During a meeting between Prime Minister Narendra Modi and UK Prime Minister Keir Starmer on the sidelines of the G7 Summit, the two leaders agreed to operationalise the CETA from July 15. India and the EU have completed negotiations on their proposed free trade agreement and are aiming to sign it before the end of the year, with both markets adopting stricter safeguards against steel imports while preserving preferential treatment for FTA partners. The new measures will supplant the steel safeguard mechanism that expired on June 30.
India's steel exporters are set to retain a competitive position in both UK and EU markets despite the stricter import controls. According to Financial Express, the new trade measures preserve India's relative advantage because of its free trade agreements with both the UK and the EU. Under the revised systems, FTA partners can access residual quota allocations, though exports beyond quota limits will attract a 50% tariff in both markets, up from the earlier 25% duty applicable under the expired safeguard mechanism. For Indian steel exporters, the latest measures suggest that while access to global markets is becoming more regulated, preferential trade arrangements continue to provide an important competitive advantage. The UK's final cut revised to 51% from the initial 60% proposal following bilateral negotiations, while India's steel quota remains the highest among all FTA partners of the EU. The protectionist move comes as global steel overcapacity is expected to grow to 721 million tonnes by 2027, according to the OECD, a volume that could threaten jobs across the entire EU steel sector.
