Key facts
- India and the UK are actively resolving issues hindering their free trade agreement.
- Discussions are underway in London to operationalize the deal.
- Key concerns include the UK's steel safeguard measure and carbon Border Adjustment Mechanism.
- These measures could affect Indian exports worth USD 775 million.
- India is also discussing proposed EU sanctions on certain Indian entities.
- The UK will implement its Carbon Border Adjustment Mechanism starting in 2027.
India and the UK are actively working to resolve issues that are hindering the implementation of their free trade agreement, signed in July last year. Discussions are ongoing in London to operationalize the deal, with a senior government official stating that an Indian team is already present to facilitate the process.
Key concerns that have emerged post-signing include the UK's steel safeguard measure and its planned Carbon Border Adjustment Mechanism (CBAM). The steel safeguard measure, effective from July 1, 2026, will reduce overall quota volumes by 60% compared to previous measures, imposing a 50% tariff on steel imports exceeding these levels. The UK's CBAM, set to be implemented in 2027, will initially target sectors such as iron, steel, aluminium, and cement, potentially impacting Indian exports worth approximately USD 775 million. India's iron and steel exports to the UK were valued at USD 893.4 million in 2025-26.
Additionally, India is engaged with the European Union regarding its proposed sanctions package against Russia, which reportedly includes certain Indian entities. India's stance is that it recognizes UN sanctions, and it is working with the EU to find the best possible resolution.
Both nations are also aiming to boost collaboration in innovation, technology, research, and startups, as discussed during a virtual meeting between Indian Commerce and Industry Minister Piyush Goyal and UK Secretary of State for Business and Trade Peter Kyle on June 2.