India, UK Negotiate Steel Trade Restrictions to Implement Trade Deal
India Works to Overcome Hurdles in Implementing India-UK Free Trade Agreement
India's Commerce Secretary, Rajesh Agrawal, announced on May 15 that his country is working with the United Kingdom to find a "creative solution" to new British steel safeguard measures that have emerged as a hurdle in operationalizing the recently concluded India-UK free trade agreement. The measures, which include tariff-rate quotas and additional duties once import thresholds are breached, have been extended by the UK government beyond June 2026 in an effort to protect domestic manufacturers from a surge in low-cost imports.
The UK's decision to extend the safeguard measures has raised concerns among Indian exporters, who fear that the continuation of these curbs could restrict market access and dilute some of the expected gains from the bilateral trade agreement. Despite these challenges, India and the UK are making progress on implementing the Comprehensive Economic and Trade Agreement (CETA), which was concluded in May 2025 and formally signed in July of the same year.
The CETA is expected to lower or eliminate tariffs across a range of sectors, including automobiles, whisky, textiles, gems and jewellery, pharmaceuticals, and engineering goods, while also improving access for services and professionals. The agreement was the result of over two years of negotiations that began in January 2022.
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| Sector | India-UK FTA Tariffs (Pre-CETA) | India-UK FTA Tariffs (Post-CETA) |
|---|---|---|
| Automobiles | Up to 10% | 0-5% |
| Whisky | Up to 30% | 0-10% |
| Textiles | Up to 15% | 0-5% |
| Gems and Jewellery | Up to 10% | 0-5% |
| Pharmaceuticals | Up to 10% | 0-5% |
| Engineering Goods | Up to 15% | 0-5% |
In addition to the challenges presented by the UK's steel safeguard measures, India is also engaged in negotiations with Washington on a bilateral trade agreement. Rajesh Agrawal stated that India remains committed to working with the US to advance the agreement, which has been in the works for several years.
India has also participated in consultations with the US administration regarding Washington's Section 301 investigations into tariff-related measures. Agrawal said that India submitted its views on May 14 and took part in consultations on the probe in the US. The Section 301 process allows the US Trade Representative to investigate and respond to what Washington considers unfair foreign trade practices. India has previously faced scrutiny from the US over tariff structures and digital trade-related policies.
Investor Takeaway
India and the UK are working to resolve trade restrictions on steel imports to implement their free trade agreement.
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