India has secured protection for a majority of its steel exports to the UK under the India-UK free trade agreement, with 85% of outbound shipments remaining outside Britain's upcoming steel safeguard measures, according to an official statement issued on Wednesday, as reported by PTI.
Steel Safeguard Agreement
The announcement comes as India and the UK prepare to operationalise their Comprehensive Economic and Trade Agreement (CETA) from July 15. The UK's proposed steel safeguard regime had emerged as one of the key sticking points in implementing the trade pact signed on July 24, 2025.
"Demonstrating the collaborative strength of the India-UK CETA, India and the United Kingdom have successfully reached a landmark consensus to safeguard and promote bilateral steel trade," the statement said. It added that "85 per cent of India's exports are out of the Steel measures. Along the lines under the Steel measures, India's interest has been protected through a mix of CSQ (country-specific quota), residual quota and access under Authorised Use Scheme (AUS)."
Implementation Details
According to the statement, both sides reached the understanding after discussions on the UK's steel measures scheduled to take effect from July 1, 2026. The agreement aims to protect commercial interests, minimise market disruptions and ensure a balanced trading environment for exporters.
Commerce and Industry Minister Piyush Goyal had discussed the issue with UK Secretary of State for Business and Trade Peter Kyle on June 2.
Timeline and Key Figures
Under the new British regime, tariff-free steel imports will be capped from July 1, with overall quota volumes reduced by 60% compared with the existing safeguard mechanism. Imports beyond the quota will attract a 50% tariff. The measures will apply to steel products that can be manufactured within the UK. Britain had earlier operated a safeguard regime that imposed import quotas. The revised framework tightens those limits further.
| Metric | Previous Regime | New Regime (Effective July 1, 2026) |
|---|---|---|
| Tariff-free quota | Existing levels | Reduced by 60% |
| Over-quota tariff | - | 50% |
| Indian exports shielded | - | 85% |
| Indian steel exports to UK (2025-26) | - | USD 893.4 million |
Carbon Border Adjustment Concerns
Apart from steel safeguards, India and the UK are also navigating concerns over Britain's Carbon Border Adjustment Mechanism (CBAM), which is scheduled to come into force in 2027. According to economic think tank GTRI, Indian exports worth about USD 775 million could be affected by the UK's planned carbon tax on products such as iron and steel, aluminium, fertiliser and cement.
After the European Union, the UK will become the second major economy to implement such a mechanism. Britain refers to the framework as the Import Carbon Pricing Mechanism and plans to initially cover sectors including iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass and cement. The tax could range between 14% and 24% of the import value once free allowances under the Emissions Trading Scheme (ETS) are fully phased out.
India's exports of iron and steel and related products to the UK stood at USD 893.4 million in 2025-26.
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