India and the UK are in talks over Britain's planned carbon border adjustment mechanism (CBAM), set to take effect in 2027. The tax could affect Indian exports like iron, steel, aluminum, and cement, with potential tariffs of 14-24% on import value. India's steel exports to the UK alone were worth $893 million in 2025-26, and the broader impact could reach $775 million in affected goods. The discussions come as a free trade agreement between the two countries is set to begin on July 15. Indian officials say they have preserved market access for steel, with about 85% of exports already exempt from UK steel safeguard rules. The CBAM issue remains a key point in trade negotiations, as India seeks to protect its exporters from carbon-related trade barriers while the UK moves to price imported emissions.
