India has approached the World Trade Organization (WTO) for consultations with the European Union (EU) as the bloc’s proposed tariffs and quotas on ferro-alloy imports deepen worries about global trade uncertainty when the two parties are negotiating a free-trade pact.
India has a substantial trade interest in the products concerned and has invoked provisions of the Agreement on Safeguards to seek consultations with the EU, according to the WTO document reviewed by Mint.
The EU issued a notification last month, proposing a safeguard duty after claiming serious injury or threat to its domestic ferro-alloy industry due to rising imports.
The EU imported iron and steel products worth about $4.25 billion from India in 2024, according to the United Nations COMTRADE database. Ferro-alloys such as silico-manganese, ferro-manganese and ferro-silicon, which are essential inputs for steelmaking in Europe, accounted for about $381 million.
While total Indian exports to the EU in the category may be small, the EU’s move increases uncertainty even as the two sides are engaged in talks for a free-trade pact. India is already negotiating a trade deal with the US to avoid the 50% tariffs. Earlier this month, Mexico approved up to 50% tariffs on cars imported from countries, including India, that do not have a trade pact with it.
“India has suggested that the consultations be held virtually between 16 and 19 December, while reserving its rights under WTO rules to take further action if the issue is not resolved,” the WTO document said. “If consultations fail to address India’s concerns, New Delhi retains the option to pursue the matter further under WTO dispute settlement mechanisms.”
Major ferro-alloy producers in India include Tata Steel Ltd, specialised manufacturers such as Indian Metals & Ferro Alloys (IMFA) and FACOR (Ferro Alloys Corporation), now part of Vedanta, as well as Maithan Alloys, Shyam Metalics, Balasore Alloys and JSW Steel.
Queries sent to spokespersons of the commerce ministry and the companies mentioned earlier remained unanswered at the time of publication.
Shrinking exports
The EU has proposed imposing safeguard measures in the form of tariff-rate quotas (TRQs), under which a specified volume of imports would be allowed to enter duty-free, while shipments beyond that limit would attract higher tariffs. According to the WTO document, India has sought consultations to review the injury findings cited by the EU and to exchange views on the implications of the proposed restrictions for its exports.
In its notification to the WTO on 12 November, the EU said a sharp rise in ferro-alloy imports, including from India, was driven by unforeseen disruptions in global trade caused by widening overcapacity. The global ferro-alloy capacity stood at about 46 million tonnes in 2023 against consumption of 27.6 million tonnes, leading surplus production to seek overseas markets.
As per the WTO document, the EU noted that despite a broader decline in global prices, its market remained attractive for exporters such as India due to higher price levels. During 2023–24, average delivered ferro-alloy prices in the EU were around 35% higher than in China and 20% higher than in India, encouraging exporters to divert excess supplies to the EU market.
To be sure, India’s ferro-alloy exports have weakened over the past few years, reflecting softer global steel demand and price pressures. Exports slipped from a peak of $3.6 billion in FY22 to a low of $2.6 billion in FY24, before recovering to $2.9 billion in FY25. In April–October 2025, these shipments stood at $1.6 billion, indicating that while exports are holding up, full-year performance will depend on the pace of global steel production, energy costs, and competitiveness of Indian producers in key markets.
India’s exports to the EU in the category have also fallen from a peak of $470 million in FY22. Other key export destinations for India in this category are South Korea at $273.4 million and the UAE at $269.6 million, reflecting strong demand from steel-producing hubs. China imported $214.8 million worth of Indian ferro-alloys, while Japan accounted for $182.9 million.
Mint reported on 13 June that EU has put India’s individual quota on hold and placed it under a “pooled quota" for exporting certain kinds of steel products to the 27-nation bloc, dealing a double whammy to a sector already reeling from America’s 50% tariff.
The 13 June move by the EU was meant to correct imbalances in the current quota system by restoring separate duty-free country-specific quotas for major exporters like Ukraine, UK, Türkiye and Korea.
However, countries like India, which fall under an “other countries" category, must share a pooled quota of around 12,500 tonnes with others, including China and Vietnam. The proposed shared quota was to remain in effect till 30 June 2026. This shared quota, known as the “residual quota," applies to ‘product category 17’, which covers “angles, shapes and sections of iron or non-alloy steel."
Limited impact
Trade economists say that a meaningful share of these shipments could fall outside the EU’s proposed tariff-rate quotas, depending on product-wise caps and country allocations.
“India’s exports are concentrated in manganese- and silicon-based alloys that European steelmakers rely on. If the tariff-rate quotas are drawn too narrowly, a sizeable portion of Indian supplies could move into the higher-duty category, raising costs for buyers and disrupting established supply chains,” said Abhash Kumar, trade economist.
Ferro-alloying elements are critical inputs in steelmaking and are widely used across automobiles, construction, machinery, energy and defence sectors, making them integral to industrial supply chains rather than consumer goods. Industry executives.
The EU’s move comes at a time when global steel and alloy markets are facing pressure from weak demand, excess capacity and a rise in protectionist measures. While safeguard duties are permitted under WTO rules, members imposing them are required to demonstrate serious injury to domestic producers and consult affected trading partners.
India and the European Union are advancing their free trade agreement talks, with the EU negotiating team visiting New Delhi from 3 to 9 December 2025. The visit included stocktaking meetings between India’s commerce secretary and the EU’s director-general for trade on 7 December, followed by meetings of India–EU trade ministers on 8–9 December to provide strategic guidance to the negotiating teams.
Both sides acknowledged constructive engagement so far, agreed to intensify technical work, and reaffirmed their commitment to bridge remaining gaps and conclude a balanced and mutually beneficial free trade agreement at the earliest, according to a commerce ministry official.