UK CBAM kept separate from India trade deal, says UK trade commissioner | carboncredit.io

The UK has confirmed that its upcoming Carbon Border Adjustment Mechanism (CBAM) will remain completely separate from the India-UK Free Trade Agreement. UK Trade Commissioner Harjinder Kang stated that CBAM was never part of the FTA negotiations and will be addressed independently when it takes effect on January 1, 2027. The CBAM will place a carbon price on imports of steel, aluminum, cement, and other carbon-intensive goods to prevent carbon leakage. Indian steel exporters had raised concerns that the green levy could raise costs and offset tariff benefits from the new trade deal. Kang acknowledged those worries but said the issue would be handled outside the FTA framework. He also clarified that UK steel safeguard measures are not targeted at India and only affect about 15-20% of Indian steel exports to the UK. The separation of carbon pricing from trade agreements is a notable policy choice. It means Indian exporters get tariff relief now but may face higher costs when CBAM starts next year. How the UK and India resolve that tension will matter for carbon market participants watching cross-border emissions pricing.