The UK has confirmed that its Carbon Border Adjustment Mechanism (CBAM) will not be part of the India-UK Free Trade Agreement. Harjinder Kang, UK Trade Commissioner for South Asia, said the carbon levy on imports like steel and cement was kept off the negotiating table from day one. Concerns about higher export costs for Indian manufacturers will be addressed separately when the CBAM takes effect in January 2027. Kang also clarified that UK steel safeguards are not targeted at India, affecting only 15-20% of Indian steel exports. The India-UK FTA, which came into force in July 2026, aims to boost bilateral trade by £25.5 billion annually. Indian exporters get immediate duty-free access on 99.1% of UK tariff lines, but future carbon costs remain an open question for carbon-intensive sectors.
