India-UK FTA: 85% of Indian Steel Exports Shielded from British Tariffs

India has achieved a significant diplomatic and economic victory in its trade negotiations with the United Kingdom, securing protection for the vast majority of its steel exports. As the two nations prepare to operationalise the Comprehensive Economic and Trade Agreement (CETA) on July 15, this breakthrough resolves one of the most contentious hurdles in the bilateral pact.

Breakthrough in Steel Safeguard Negotiations

The UK’s proposed steel safeguard regime had long been a major sticking point in the implementation of the India-UK trade pact. Under the new British framework, which is set to take effect on July 1, 2026, tariff-free steel imports will be capped, with overall quota volumes reduced by 60% compared to existing mechanisms. Any imports exceeding these quotas would attract a steep 50% tariff.

However, through high-level discussions—including those between Commerce and Industry Minister Piyush Goyal and UK Secretary of State Peter Kyle—a landmark consensus was reached. India has successfully ensured that 85% of its outbound steel shipments remain outside these restrictive British curbs.

Protecting Indian Interests Through Strategic Quotas

To mitigate the impact of the tighter UK regulations, India has secured a sophisticated protective structure. The agreement utilizes a strategic mix of Country-Specific Quotas (CSQ), residual quotas, and access under the Authorised Use Scheme (AUS). This multifaceted approach aims to protect Indian commercial interests, minimize market disruptions, and maintain a balanced trading environment for exporters.

The importance of this protection cannot be overstated. India's exports of iron, steel, and related products to the UK were valued at USD 893.4 million in the 2025-26 fiscal year. By shielding 85% of these exports, the CETA provides much-needed stability for Indian manufacturers facing a more protectionist British market.

The Next Challenge: The Carbon Border Tax

While the steel quota issue has seen a major resolution, Indian exporters face a looming secondary challenge: the UK's Import Carbon Pricing Mechanism (the British version of the EU's CBAM). Scheduled to come into force in 2027, this mechanism will impose a carbon tax on various sectors, including iron, steel, aluminium, fertiliser, hydrogen, and cement.

ಗ್ಲೋಬಲ್ ಟ್ರೇಡ್ ರಿಸರ್ಚ್ ಇನಿಶಿಯೇಟಿವ್ (GTRI) ಪ್ರಕಾರ, ಸುಮಾರು 775 ಮಿಲಿಯನ್ USD ಮೌಲ್ಯದ ಭಾರತೀಯ ರಫ್ತುಗಳು ಈ ಕಾರ್ಬನ್ ತೆರಿಗೆಯಿಂದ ಬಾಧಿತವಾಗಬಹುದು. ಯುಕೆ ಯ ಎಮಿಷನ್ಸ್ ಟ್ರೇಡಿಂಗ್ ಸ್ಕೀಮ್ (ETS) ಅಡಿಯಲ್ಲಿನ ಉಚಿತ ವಿನಾಯಿತಿಗಳನ್ನು ಸಂಪೂರ್ಣವಾಗಿ ಹಂತ ಹಂತವಾಗಿ ರದ್ದುಗೊಳಿಸಿದ ನಂತರ, ಈ ತೆರಿಗೆಯು ಆಮದು ಮೌಲ್ಯದ 14% ರಿಂದ 24% ರಷ್ಟಿರಬಹುದು. ಇಯು (EU) ನಂತರ ಇಂತಹ ವ್ಯವಸ್ಥೆಯನ್ನು ಜಾರಿಗೆ ತರುವ ಎರಡನೇ ಪ್ರಮುಖ ಆರ್ಥಿಕತೆಯಾಗಿ ಯುಕೆ ಹೊರಹೊಮ್ಮುತ್ತಿರುವುದರಿಂದ, ಈ ಪರಿಸರ ಸಂಬಂಧಿತ ವ್ಯಾಪಾರ ಅಡೆತಡೆಗಳನ್ನು ಎದುರಿಸುವುದು ಭಾರತೀಯ ಉದ್ಯಮಕ್ಕೆ ಮುಂದಿನ ನಿರ್ಣಾಯಕ ಸವಾಲಾಗಿರಲಿದೆ.

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