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What is the story about?
India's Commerce Secretary Rajesh Agrawal has said that while the Free Trade Agreement (FTA) with the United Kingdom (UK) is very close to being operationalised, both the sides are working to resolve the pending sticking points.
He noted that the "UK's new steel measure wasn't factored in by negotiating team," and work is underway to resolve that.
The UK has decided to cut tariff-free steel import quotas by 60% from 1st July 2026, what many experts described as following the EU’s steel model by "combining safeguard restrictions with carbon-linked border taxes."
Founder of the Global Trade Research Institute (GTRI), Ajay Srivastava said that India already faces a harsh trade environment in the EU steel market, as Indian steel exports will still bear the cost of the EU’s Carbon Border Adjustment Mechanism (CBAM) along with safeguard restrictions even after the India-EU FTA comes into force.
For the EU, he said that even shipments entering within quota limits and paying zero customs duty could still face around $38 in CBAM-related costs for every $100 of steel exported.
He added that once exports exceed safeguard quotas, the EU can impose a 50% over-quota duty, pushing the combined burden of safeguard duties and CBAM costs to as high as $95 per $100 shipment.
He called for negotiation of similar terms with the UK as with the EU on the FTA to ensure that the commercial value of the trade pact isn't eroded.
India and the UK had signed an FTA on 24th July 2025 along with a convention to prevent double taxation. Prime Ministers Narendra Modi and Keir Starmer had termed it a key milestone, with the goal of doubling trade to $120 billion by 2030.
The deal lowered average tariffs on UK's products in India from 15% to 3%, while providing duty-free access for 99% of Indian exports to the UK.
Also Read: Economists warn fuel, milk price hikes may raise retail inflation by up to 0.42%
He noted that the "UK's new steel measure wasn't factored in by negotiating team," and work is underway to resolve that.
The UK has decided to cut tariff-free steel import quotas by 60% from 1st July 2026, what many experts described as following the EU’s steel model by "combining safeguard restrictions with carbon-linked border taxes."
Founder of the Global Trade Research Institute (GTRI), Ajay Srivastava said that India already faces a harsh trade environment in the EU steel market, as Indian steel exports will still bear the cost of the EU’s Carbon Border Adjustment Mechanism (CBAM) along with safeguard restrictions even after the India-EU FTA comes into force.
For the EU, he said that even shipments entering within quota limits and paying zero customs duty could still face around $38 in CBAM-related costs for every $100 of steel exported.
He added that once exports exceed safeguard quotas, the EU can impose a 50% over-quota duty, pushing the combined burden of safeguard duties and CBAM costs to as high as $95 per $100 shipment.
He called for negotiation of similar terms with the UK as with the EU on the FTA to ensure that the commercial value of the trade pact isn't eroded.
India and the UK had signed an FTA on 24th July 2025 along with a convention to prevent double taxation. Prime Ministers Narendra Modi and Keir Starmer had termed it a key milestone, with the goal of doubling trade to $120 billion by 2030.
The deal lowered average tariffs on UK's products in India from 15% to 3%, while providing duty-free access for 99% of Indian exports to the UK.
Also Read: Economists warn fuel, milk price hikes may raise retail inflation by up to 0.42%
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