UK Trade Commissioner Harjinder Kang confirmed that the UK's Carbon Border Adjustment Mechanism (CBAM) was never part of the India-UK free trade agreement negotiations and will be addressed separately. The CBAM, set to take effect on January 1, 2027, will impose a carbon price on imports of steel, aluminum, cement, and other carbon-intensive goods entering the UK. Kang acknowledged concerns that the mechanism could raise export costs for Indian manufacturers if carbon standards change after the trade pact is implemented. However, he emphasized that the policy is designed to ensure UK decarbonization efforts reduce global emissions rather than displace them overseas. The CBAM applies to specified goods across the whole UK, including Northern Ireland. The FTA itself, which came into force in July 2026, aims to boost bilateral trade by 25.5 billion pounds annually. Indian steel exports face quota-based safeguard measures covering about 15-20% of affected categories, which Kang said were not targeted at India and were resolved amicably.
