India-UK Trade Talks: Steel, CBAM in spotlight as both sides work towards CETA rollout

Union Commerce and Industry Minister Piyush Goyal met UK Secretary of State for Business and Trade Peter Kyle in New Delhi on Tuesday to fast-track the implementation of the Comprehensive Economic and Trade Agreement (CETA) -- a free-trade agreement (FTA) -- between both nations. Talks between both sides focused on steel safeguard measures and the Carbon Border Adjustment Mechanism (CBAM), with discussions aimed at resolving pending issues and ensuring the smooth rollout of the landmark free trade pact, said sources.

India may consider rebalancing certain aspects of the agreement relating to Scotch whisky and other products, said one of the sources.

The India-UK FTA is set to come into force after the final round of discussions is completed. The discussions are expected to span key areas like the UK's steel safeguard measures and market access concerns.

The India-UK Comprehensive Economic and Trade Agreement is expected to significantly boost bilateral trade by reducing tariffs across multiple sectors. The agreement provides enhanced market access for businesses in both countries and grants duty-free access to 99 percent of Indian exports, including textiles, leather goods, engineering products, and several manufacturing sectors.

India and the UK signed the pact after years of negotiations. However, while the broad contours of the deal have been agreed upon, both countries are yet to work out final implementation-related discussions before the agreement formally comes into force.

Both sides are learned to be working towards a unique and creative solution to resolve the steel issue and operationalise the agreement soon.

India-UK Trade Deal: CETA implementation delayed over steel

A key area of concern for India is the UK's approach to steel imports and carbon-related trade measures. The talks on steel safeguard measures assume significance because they can impact the competitiveness of Indian steel exports in the British market.

Also, the Carbon Border Adjustment Mechanism (CBAM) and related carbon compliance requirements are turning out to be a major trade issue globally, with exporters concerned about potential additional costs linked to carbon emissions.

India-UK FTA negotiations

India and the UK have been negotiating a trade agreement for several years, with talks gathering steam in 2021 after Brexit formally separated the UK from the EU's trade framework. The proposed pact is aimed at strengthening economic ties between the two economies.

Although the agreement was initially expected to be completed by 2023, negotiations were reportedly delayed by several issues, including steel tariffs, market access for services and protection for Scotch whisky.

The trade minister had previously maintained that India would not compromise on safeguarding its domestic steel industry while pursuing fair market access abroad. During FY26, bilateral engagement picked up again, with both countries appointing dedicated trade officials to resolve the remaining technical issues before the agreement could formally be implemented.

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