India and the UK are close to operationalizing their free trade agreement signed in July 2025. The main sticking points are the UK's new steel safeguard measures and its Carbon Border Adjustment Mechanism (CBAM), set to take effect in 2027. An Indian team is in London to negotiate these issues, which could affect Indian exports worth $775 million in sectors like steel, aluminum, and cement. The UK will cut tariff-free steel import quotas by 60% from July 2026, with a 50% tariff on excess volumes. Meanwhile, CBAM will impose a carbon tax on imports in high-emission sectors. Resolving these issues is critical for the deal to deliver its promised economic and climate benefits, including smoother trade in low-carbon goods and aligned carbon pricing approaches.
