Navigating Europe's regulatory maze

Market access to the EU is shifting from tariff barriers to regulatory requirements

The European Union’s recent decision to tighten steel import restrictions highlights the emerging shifts in the global trade landscape. From July 2026, the EU replaced its existing steel safeguard regime with a new framework that reduced duty-free tariff-rate quotas (TRQs) by roughly 47 per cent and increased the out-of-quota duty from 25 per cent to 50 per cent.

The new framework also expanded the range of steel product categories covered and introduced stricter traceability requirements, including “melt-and-pour” reporting, which requires importers to identify where the steel was originally melted and cast. By June 30, 2027, the European Commission will assess whether the framework’s scope should be extended to downstream goods manufactured from steel or containing significant amounts of it. 

 The steel TRQ decision is only one part of a broader European regulatory “spaghetti bowl” that includes the Carbon Border Adjustment Mechanism (CBAM), Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), Ecodesign for Sustainable Products Regulation (ESPR), Digital Product Passports, the EU Deforestation Regulation, REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals), the Battery Regulation and new waste shipment rules. 

While each measure may be justified on environmental, consumer protection or industrial policy grounds, together they are reshaping market access by linking trade more closely to carbon performance, product sustainability, supply-chain due diligence and traceability. For exporters, the challenge is no longer just tariffs, but navigating an increasingly dense web of regulatory compliance. 

 These measures affect exporters in different ways. Some act as border measures, directly impacting exporter entry into the EU market (such as CBAM, steel tariff-rate quotas ). Others are product-specific requirements that must be met before goods can be sold in Europe (such as ESPR, Digital Product Passports, REACH and the Battery Regulation). A third category operates through supply-chain regulations, such as the CSRD and CSDDD, which require European companies to obtain detailed information on sustainability, emissions and traceability from suppliers worldwide. 

Alongside these measures is the EU’s extensive framework of technical regulations and standards, including REACH, CE marking for European conformity, packaging and product safety requirements. Though less visible than CBAM, they can act as barriers through testing, certification, documentation and ongoing compliance obligations. 

Perhaps the least discussed but most revealing example is the revised EU Waste Shipment Regulation. The EU has tightened controls on exports of waste, particularly to non- Organisation for Economic Co-operation and Development countries, unless those countries can demonstrate environmentally sound waste management systems. The regulation affects scrap traders, recyclers and processors. While framed as an environmental measure, it can effectively retain critical low-carbon raw materials within Europe. For aluminium and steel producers, this can reduce scrap availability, increase costs for producers elsewhere, and complicate decarbonisation efforts. Europe is, therefore, not only regulating products entering its market but also shaping access to the materials needed to produce them. 

Viewed together, these measures represent a fundamental shift in the nature of trade barriers. A steel or aluminium exporter may need to provide emissions data under CBAM, sustainability disclosures for CSRD or CSDDD through value chain, product-level information under ESPR, compliance declarations under REACH, and traceability records under sector-specific regulations. This is before considering TRQs, anti-dumping measures, conformity assessments and other technical standards. Even if free-trade agreements or FTAs reduce tariffs to zero, exporters will still need to navigate this increasingly complex regulatory architecture. Market access, therefore, is shifting from tariff barriers to regulatory requirements. 

For India, the priority is to institutionalise engagement with the EU, rather than respond to regulations one by one.

First, the government should establish an inter-ministerial coordination mechanism to monitor emerging EU regulations and assess their implications for India. Given that these measures increasingly cut across sectors and ministries, including commerce, power, new & renewable energy, steel, mines, heavy industries and environment, a coordinated platform involving relevant ministries and industry bodies would help develop informed positions and ensure timely engagement with the EU during the EU consultation process. 

Second,  India should use the India–EU FTA to establish a formal regulatory cooperation mechanism, such as an India-EU Regulatory Help Desk. Such a platform (with representation from industry bodies) could provide early notification of proposed regulations with significant trade implications, facilitate dialogue on standards, and MRV (measurement, reporting and verification) procedures, promote the recognition of equivalent measures where appropriate, and advocate reasonable transition periods for compliance. 

Third, India should develop a mechanism to calculate the actual compliance and trade costs of EU regulations by collecting data on certification costs, compliance time, rejected or delayed consignments, and their impact on industries, particularly small and medium-sized enterprises (SMEs). This evidence-based approach would strengthen India’s engagement with the EU and its participation in committees of the World Trade Organization. 

Fourth, India should build issue-specific coalitions with other developing countries to engage with the EU on regulations that impose disproportionate compliance burdens. The objective should not be to oppose sustainability goals, but to ensure that their implementation takes into account differences in levels of economic development, technical expertise and institutional capacity across countries. This should include advocating phased implementation where justified, alongside technical cooperation, knowledge sharing and capacity-building to help industries adapt to the new requirements. 

And finally, industry will have to take greater ownership of domestic preparedness. Investments today in supply chain due diligence, MRV traceability, emissions measurement, product-level data systems, and certifications standards will only help make Indian industry future-ready. Industry associations can further support micro, small and medium-sized enterprises by developing shared compliance platforms and providing technical assistance to help them meet evolving regulatory requirements.

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The writers are, respectively, a policy fellow at the Grantham Research Institute at the London School of Economics and a Mumbai-based economist