India’s iron and steel exports to the European Union (EU) declined nearly 20% year-on-year by volume during the first half of FY27, as tighter import quotas and carbon-related trade costs weighed on shipments to one of the country’s important overseas markets. Exports fell to 1.53 million tonnes between April and September 2026, compared with 1.91 million tonnes in the corresponding period a year earlier.
At the same time, Indian steel shipments to other regions expanded sharply. Exports to the Americas surged 262% by volume, while shipments to Africa increased 96%. The contrasting performance points to a geographical shift in India’s steel trade as exporters explore alternative destinations amid changing European trade conditions. However, the growth in other markets has not entirely offset the decline in Europe.
India’s Steel Exports to EU Decline Nearly 20%
An analysis of Commerce Ministry data by Moneycontrol shows that India’s iron and steel exports to the EU fell 19.8% by volume to 1.53 million tonnes in April–September FY27, from 1.91 million tonnes in the same period last year.
The decline was also visible in export earnings. Shipments to the EU were valued at $1.48 billion, down 17% from $1.79 billion a year earlier.
The difference between the decline in volume and value suggests that lower shipment quantities were the main contributor to the fall in export earnings, rather than a comparable reduction in average export realisations.
The slowdown became particularly pronounced in September. India’s steel exports to the EU fell 50.4% year-on-year to 197,433 tonnes during the month.
| Period | EU steel exports | Year-on-year change |
|---|---|---|
| April–September FY27 | 1.53 million tonnes | -19.8% |
| April–September FY26 | 1.91 million tonnes | — |
| September FY27 | 197,433 tonnes | -50.4% |
| July FY27 | 316,414 tonnes | -2.3% |
| August FY27 | 387,143 tonnes | Largely unchanged |
The September decline was especially significant because shipments had been relatively stable in July and August. In the second quarter of FY27, exports to the EU declined 18.8% to approximately 901,000 tonnes, with September accounting for nearly 97% of the quarterly decline in volume.
The data indicates a deterioration towards the end of the quarter, although changes in European demand and shipment schedules may also have contributed.
Americas and Africa Become Alternative Export Markets
While European shipments weakened, Indian steel exporters recorded substantial growth in the Americas and Africa.
Exports to the Americas, which include North America and Latin America, increased 262% by volume during April–September FY27. In value terms, shipments more than doubled, rising 117.1% to $1.42 billion from $654.3 million.
Africa also recorded strong growth. Indian iron and steel shipments to the continent increased 96% by volume, while export value rose 76.5% to $334.2 million.
The difference between volume and value growth indicates that export earnings did not rise as quickly as shipment quantities in these markets.
| Export destination | Change in export volume | Export value |
|---|---|---|
| European Union | -19.8% | $1.48 billion |
| Americas | +262% | $1.42 billion |
| Africa | +96% | $334.2 million |
| Europe, including EU and other European markets | -6% | $2.11 billion |
The Americas’ growth is particularly notable because the region has become a much larger destination for Indian steel in the latest reporting period. Africa’s expansion also provides Indian producers with additional opportunities to diversify their customer base.
However, these increases should be viewed in the context of different market sizes, product requirements, prices and freight costs. A percentage increase in shipments does not necessarily translate into equivalent profitability for steel producers.
EU Introduces Tighter Steel Import Quotas
The decline in Indian shipments comes after the EU introduced a more restrictive steel import regime from July 1, 2026.
Under the revised framework, the bloc reduced its annual duty-free steel import quota to 18.3 million tonnes from 33.8 million tonnes. Imports exceeding the prescribed quotas face a 50% tariff, compared with the earlier 25% safeguard duty.
The changes are intended to protect European steel producers from global overcapacity and rising import competition.
India has also seen its country-specific quota reduced. According to an analysis by the London School of Economics’ Grantham Research Institute cited by Moneycontrol, India’s allocation declined by around 30% to 1.94 million tonnes from 2.79 million tonnes.
The reductions vary by product category, making the impact different across steel manufacturers and exporters.
For example:
- Hot-rolled steel sheets and strips saw their quotas reduced by 34%.
- Cold-rolled steel sheet quotas were cut by 59%.
- Shipments above the applicable quota face a 50% tariff.
The restrictions can make Indian steel less competitive once available duty-free quota volumes are exhausted. Exporters may have to absorb higher costs, renegotiate prices or redirect shipments to other markets.
India has also secured a separate 1.9-million-tonne annual country-specific tariff-rate quota, with the government estimating that exporters could access another 0.9 million tonnes through residual quotas. These figures reflect the evolving quota arrangements and should be distinguished from the product-specific allocations and estimates used in other analyses.
CBAM Adds Another Cost for Indian Steelmakers
The EU’s Carbon Border Adjustment Mechanism (CBAM) is another challenge for Indian steel exporters.
CBAM entered its definitive phase in January 2026 and covers carbon-intensive imports, including iron and steel. It is designed to account for emissions generated during the production of imported goods and reduce the risk of companies shifting production to jurisdictions with less stringent climate policies.
For Indian steelmakers, the mechanism is important because a significant part of domestic steel production relies on coal-based processes. These production methods can generate higher carbon emissions than some alternative technologies, potentially increasing the carbon-related cost of supplying European buyers.
The financial obligations are being phased in. The first surrender of CBAM certificates for imports covered by the definitive regime is due in 2027, relating to emissions embedded in 2026 imports.
Even before the full financial settlement, the mechanism can influence commercial decisions. European buyers may consider the emissions profile of suppliers when negotiating contracts, comparing prices and deciding where to source steel.
The EU’s carbon mechanism is separate from its steel import quotas. Consequently, having access to a duty-free quota does not automatically exempt Indian steel from CBAM-related obligations.
India-EU Trade Arrangements Offer Some Relief
India has been negotiating improved access for its steel exports through its trade arrangements with the EU.
In September 2026, a government official said India had secured a country-specific annual steel quota of 1.9 million tonnes, with the possibility of another 0.9 million tonnes through residual quotas. The combined potential access of 2.8 million tonnes was expected to cover more than 80% of India’s previous-year steel exports to the bloc.
However, the quota does not remove the separate carbon-related costs under CBAM. Exporters must therefore consider both the availability of tariff-free quota and the emissions-related requirements when planning shipments.
India is also working to strengthen domestic verification capacity so that steel exporters can obtain the emissions documentation required under the European mechanism.
The extent to which these arrangements support future exports will depend on quota availability, product eligibility, compliance costs and the ability of Indian producers to compete with suppliers from other countries.
What the Export Shift Means for Indian Steelmakers
The changing export pattern creates both opportunities and challenges for India’s steel industry.
New demand in the Americas and Africa could help producers reduce their dependence on Europe. However, expanding into new markets requires competitive pricing, reliable logistics, compliance with local standards and established distribution relationships.
There is also a risk that several exporters may redirect shipments towards the same destinations, increasing competition and putting pressure on prices.
The broader export picture has nevertheless been relatively strong. BigMint’s provisional data for H1 FY27 showed that India’s total steel exports, including semi-finished and stainless steel, increased 38% year-on-year to 5.53 million tonnes. The country became a net steel exporter during the period, with exports exceeding imports by 0.69 million tonnes.
These figures cover a broader product scope than the iron and steel export data used in Moneycontrol’s regional analysis, so the two datasets should not be directly combined.
The Bigger Picture
India’s steel export performance reflects a changing global trade environment in which carbon regulations, import restrictions and regional demand are influencing where producers sell their products. Europe remains an important market, but tighter quotas and CBAM requirements are increasing the complexity of exporting there.
The sharp growth in shipments to the Americas and Africa shows that Indian companies are finding alternative destinations. Yet geographical diversification is not simply a matter of replacing lost European volumes. Exporters must assess freight expenses, product demand, pricing, payment risks and local competition before these markets can deliver sustainable returns.
Looking Ahead
The next few months will show whether the increase in exports to the Americas and Africa can be sustained and whether the sharp September decline in shipments to the EU continues. Indian steelmakers will also need to monitor product-wise quota utilisation, European demand and the implementation of CBAM certificate requirements.
For India’s steel industry, the longer-term challenge will be to combine export-market diversification with lower-emission production. Improving energy efficiency, adopting cleaner technologies and strengthening emissions measurement could help Indian producers maintain access to demanding international markets while competing on cost and product quality.
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