India's EU steel quota is 1.64 million tonnes. Only 694,853 of them are locked in by the FTA

The draft India-EU free trade text published in Brussels gives India a country-specific steel tariff-rate quota of 1,641,470 tonnes a year. That headline is larger than the guaranteed number. Only 694,853 tonnes sit in the FTA column. The other 946,616 tonnes are an MFN slice that every partner can compete for. Out-of-quota metal faces a 50 percent tariff under the Steel Overcapacity Regulation that took effect on 1 July.

India currently sells about 4 million tonnes of steel a year into the EU. The new cap, even if every tonne of the 1.64 million is filled, is a cut. The largest single line is non-alloy and other alloy hot-rolled sheet and strip at 509,605 tonnes, of which 210,408 tonnes are FTA and 299,197 tonnes are MFN. Cold-rolled sheet gets 218,000 tonnes. Metallic-coated sheet gets 197,000 tonnes. The list also covers organic-coated sheet, tin mill products, stainless, merchant bars, rebars, wire rod, pipes and tubes, 16 categories in all.

The July regulation replaced safeguard measures that had run since 2018 and expired in June after the eight-year WTO limit. Brussels wrote the new system to police global overcapacity, a phrase that in EU documents usually means China and, by spillover, anyone who sells into the same market. India is an FTA partner in waiting, not a target of that sentence, and still takes a hard quota. Talks on the broader deal closed in January. The Commission has sent a signature proposal to the Council. Entry into force is pencilled for the first quarter of next year.

There is a second number in the same draft that cuts the other way. EU car shipments to India could rise about sixfold once tariffs fall. Steel goes west under a cap. Cars come east under a liberalised schedule. That is the exchange rate of the chapter, whether or not either capital describes it that way.

CBAM, the carbon border levy, still sits on top of the quota. Cleaner Indian mills will pay less per tonne. Dirtier mills will pay more, even inside the 694,853 tonnes that the FTA reserves. Quota access is not the same as costless access. The draft also contains language meant to stop India being left worse off if the EU later gives a fatter quota to another FTA partner. That clause is an admission that the first number may not be the last.

Mills in India will now plan export books against 0.69 million tonnes of reserved EU demand and a scramble for the MFN remainder. Four million tonnes of current trade does not fit in 1.64 million tonnes of paper. The metal that misses the quota will need another buyer or a 50 percent tariff. That is the binding constraint in the draft, and it is already public.