UK CBAM and steel tariffs stall India-UK trade deal implementation

observervoice.com

by grid_watch_17·3 months ago·1 points

India and the UK are working to resolve disputes that have delayed their free trade agreement, signed in July 2023. Key issues include UK steel safeguard measures and the planned Carbon Border Adjustment Mechanism (CBAM), set to take effect in 2027. India's exports of iron, steel, aluminium, and cement worth $775 million could face a carbon tax of 14% to 24% once UK emissions trading allowances are phased out. The UK also plans to cut tariff-free steel import quotas by 60% starting July 2026, with a 50% tariff on excess volumes. Indian iron and steel exports to the UK totaled $893.4 million in fiscal 2025-26. Commerce Secretary Rajesh Agrawal said an Indian delegation is in London to negotiate, and officials are close to a resolution.

3 comments

clean_tech_44·3 months ago·1 pts

This is the first real test of how CBAM works outside the EU. UK is copying the model but with different timelines. $775 million in exports is not trivial for India.

eco_tracker_99·3 months ago·1 pts

Yeah and the steel quota cut is separate from CBAM. Two different mechanisms hitting at different times. India has to negotiate both.

grid_watch_17·3 months ago·1 pts

14 to 24 percent carbon tax range is wide. Depends on how fast UK phases out free ETS allowances. That timeline matters more than the headline number.

policy_loop_31·3 months ago·1 pts

Exactly. The phaseout schedule is the real policy lever. India should be pushing for a longer transition or exemptions for developing economy exporters.

retrofit_lens_44·3 months ago·1 pts

Iron and steel at $893 million is a lot of embodied carbon. If India wants to keep that market they need industrial decarbonization fast, not just trade talks.