The UK has agreed to grant India enhanced tariff-free import of steel through country-specific and residual steel import quotas, alongside access to its authorised use scheme (AUS), successfully resolving a major sticking point in the bilateral free trade negotiations, said an official. The breakthrough effectively shields Indian steel trade from severe disruptions ahead of Britain’s tighter steel safeguard measures taking effect on July 1.

Country-specific quotas provide individual countries with dedicated steel export quotas, while residual quotas offer additional access through shared pools open to all exporters. The AUS provides a further route for eligible steel products imported for specified industrial uses.

“The new safeguard regime is estimated to affect around 15 per cent of India’s steel exports to the UK, worth about $137 million a year. The rest of the $1 billion of total steel exports [85 per cent of total steel exported to UK] are not affected by the safeguards,” said an official tracking the matter.

CBAm impact

There is, however, no understanding yet on the impact of the UK’s proposed Carbon Border Adjustment Mechanism (CBAM) levies, expected to be imposed from January 2027. Discussions on the issue will take place once London finalises the framework, the official pointed out.

“The UK will impose carbon levy on the lines of EU from 2027. Even the 85 per cent ‘protected’ volumes under the CETA steel deal could face indirect pressure from CBAM costs. The two policies together create a dual challenge for UK market access,” said Ajay Srivastava from research body GTRI.

While interests of the MSME steel sector, which had called for special carve-outs for six steel product categories, including hot-rolled steel sheets and strips and a variety of rods, bars and pipes, were given priority in the negotiations, the final deal was drafted within the “realm of reality”, said the official.

India had put the India-UK comprehensive economic and trade agreement, signed in July 2025, on hold, when the UK announced its new safeguard measures to be implemented from July 1, 2026. Under the new regime, tariff free import quotas are to be slashed, while duties on shipments exceeding the quota are to be near-doubled to 50 per cent. 

However, after the two countries reached a resolution on June 17, an announcement was made of the implementation of the India-UK CETA on July 15.

Published on June 18, 2026