India and the United Kingdom are working to resolve post-signing issues to operationalise their bilateral trade pact, according to Commerce Secretary Rajesh Agrawal. Speaking to reporters, Agrawal stated that the Indian team is already in London to take forward the discussions and "see that we are able to operationalise" the deal.
"There are certain issues which have come up after the deal has been signed. Those issues are under resolution," Agrawal told reporters. The Comprehensive Economic and Trade Agreement (CETA) was signed on July 24, 2025, but implementation has been delayed due to new trade measures introduced by the UK.
Steel Safeguard Measure
A major sticking point is the UK steel safeguard measure, which reduces import quotas on steel products. Earlier, Britain had safeguard measures that imposed import quotas, but the new measures further reduce that quota. The measure will apply to imports of steel products that can also be made in the UK. UK Secretary of State for Business and Trade Peter Kyle held a meeting with Commerce and Industry Minister Piyush Goyal on these issues earlier this month.
Carbon Border Adjustment Mechanism (CBAM)
The UK has also decided to implement its Carbon Border Adjustment Mechanism (CBAM) starting in 2027, becoming the second economy after the European Union to do so. The UK calls it the import carbon pricing mechanism, initially focusing on sectors including iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass, and cement. According to economic think tank GTRI, India's exports worth USD 775 million to the UK could be impacted by this carbon tax. The tax could range from 14-24 per cent of the import value on full phase-out of free allowances under the ETS (Emission Trading System).
| Sector | India's Exports to UK (2025-26) | CBAM Coverage |
|---|---|---|
| Iron and steel & allied products | USD 893.4 million | Yes |
| Aluminium | Not specified | Yes |
| Fertiliser | Not specified | Yes |
| Cement | Not specified | Yes |
| Hydrogen | Not specified | Yes |
| Ceramics & glass | Not specified | Yes |
India's exports of iron and steel and allied products to the UK stood at USD 893.4 million in 2025-26, according to data cited in the report.
EU Sanctions on Russia
Separately, on the issue of the European Commission's proposed sanctions package on Russia, which includes certain Indian entities, Agrawal said that India is engaged with the EU. "We are engaged, and we are looking at what best can be done. But as you recall, India normally recognises the UN sanctions," he added. As per reports, certain Indian firms are among 50 companies that could face fresh EU export-control restrictions under the bloc's proposed 21st sanctions package against Russia.
Implications for Trade Professionals
For importers and exporters, the resolution of these issues is critical to harnessing the benefits of CETA. The steel safeguard reduction may tighten access for Indian steel shipments, while the upcoming CBAM will require compliance and carbon accounting for affected products. Indian firms exporting iron, steel, aluminium, fertiliser, and cement to the UK must prepare for the carbon border levy from 2027. The EU sanctions issue adds another layer of compliance risk for Indian entities involved in trade with Russia.
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