India’s Steel Exports Projected to Plunge Up to 30% in FY27 Amid Stricter EU Quotas
New Delhi, June 31: India’s finished steel exports are anticipated to face a steep decline of 25-30% year-on-year in the financial year 2027. According to a recent report by Crisil Intelligence, this drop is primarily driven by the European Union’s (EU) newly tightened safeguard measures, which restrict duty-free market access.
The EU’s Revised Safeguard Regime The EU, which remains India’s largest overseas steel market, implemented a revised framework on July 1. Key changes impacting Indian exporters include:
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Reduced Quotas: India’s product-specific duty-free quota has been slashed by nearly 30%, dropping from about 2.8 million tonnes (MT) to approximately 1.9 MT.
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Increased Tariffs: The out-of-quota tariff has been doubled from 25% to 50%, further tightening market entry against the backdrop of global steel overcapacity.
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Steepest Cuts: Stainless cold-rolled sheets and strips face the most significant quota reduction at 69%, while non-alloy and other alloy cold-rolled sheets see a 59% decline.
Potential Offsets and Domestic Impact While the strict quotas pose a challenge, Indian exporters might find some relief through newly introduced Free Trade Agreement (FTA)-linked quota categories. Exporters can compete for an additional 1.2 MT under the FTA country-specific quota (FTA-CSQ) and 0.4 MT under the FTA-others category. However, these pools are highly competitive and do not guarantee allocations for India.
With export realisations under pressure, Crisil cautions that domestic steelmakers will likely pivot their focus inward. This shift could lead to an oversupply in the domestic market, putting downward pressure on steel prices and overall profitability—a scenario reminiscent of the export slump in FY23. Consequently, this overall decline may result in India losing its position as a net exporter of finished steel, having previously exported around 6.6 MT in the last financial year.
