India and UK Discuss UK Carbon Border Tax Impact on Steel Exports

India and the UK are in talks about Britain's upcoming carbon border adjustment mechanism (CBAM), set to take effect in 2027. The tax will initially cover iron, steel, aluminum, fertilizers, hydrogen, ceramics, glass, and cement. Indian exports of iron and steel to the UK were worth USD 893.4 million in 2025-26, and a think tank estimates USD 775 million in total Indian exports could be affected. The discussions come as a new India-UK free trade agreement takes effect. The commerce secretary said both sides are working through CBAM regulations, which could add a 14-24% tax on imports. The UK's steel safeguard measures, which cut duty-free quotas by 60%, have also been a point of negotiation. About 85% of India's steel exports to the UK were already exempt from those safeguards, and the trade deal secures access for the rest via country-specific and residual quotas.