India and the UK are negotiating a trade deal with major sticking points on steel. The UK plans to cut tariff-free steel import quotas by 60% from July 2026 and introduce a Carbon Border Adjustment Mechanism (CBAM) in 2027, which could add duties of 14% to 24% on carbon-intensive imports like iron and steel. Indian steel exports to the UK were worth $893.4 million in the 2025-26 fiscal year, so these policies directly threaten revenue for producers like Tata Steel, JSW Steel, and Jindal Steel & Power. For investors, the key takeaway is that Indian steelmakers face both immediate tariff pressure and long-term compliance costs. The UK CBAM mirrors the EU's carbon border tax, meaning Indian producers will need to invest in greener production methods to stay competitive in developed markets. Without these investments, they risk losing market share to lower-carbon competitors or regions with better trade terms. Tracking the progress of these talks and company export strategies will be important for assessing sector risk.
