India May Reconsider Scotch Whisky Tariff Reductions Amid UK Steel Trade Restrictions

India Considers Revisiting Tariff Concessions on British Exports

Ahead of talks with a visiting British minister on June 2, India may revisit tariff concessions granted to certain British exports, including Scotch whisky, if the United Kingdom does not roll back recently tightened steel safeguard measures.

The Comprehensive Economic and Trade Agreement (CETA) between India and the UK, signed in July 2025, granted significant concessions to British exporters. One of the key wins for the UK was the reduction of import duties on whisky and gin from 150 percent to 75 percent, with tariffs falling further to 40 percent over a 10-year period. However, India is now seeking to rebalance the trade agreement due to trade irritants that have emerged since its conclusion.

New Delhi is concerned about the UK's recently extended steel safeguard measures, which include lower tariff-free import quotas and additional duties once import thresholds are breached. Indian exporters have raised concerns that the continuation of these curbs could restrict market access and dilute some of the gains expected from the bilateral trade agreement.

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India and the UK concluded negotiations for CETA in May 2025, providing duty-free access for 99 percent of Indian exports to the UK while reducing tariffs on a wide range of British products. However, the recent extension of steel safeguard measures by the UK has raised concerns in New Delhi.

The UK government recently decided to continue safeguard measures on imports of certain steel products beyond June 2026, arguing that the restrictions are necessary to shield domestic manufacturers from a surge in low-cost imports. Indian officials have argued that such measures risk creating new trade barriers and offsetting benefits negotiated under the FTA.

India will also seek clarity on the UK's planned Carbon Border Adjustment Mechanism (CBAM), which is set to be introduced in January 2027. The mechanism will impose a carbon border tax on imports of emissions-intensive products, including steel and aluminium. Indian officials have argued that such measures could undermine market access secured under the pact.

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Unless the UK rolls back its steel safeguard measures and provides clarity on CBAM, the implementation of the India-UK free trade agreement could be delayed.