India’s free trade agreement (FTA) with the UK has hit an early hurdle just ahead of its implementation after the latter tightened steel safeguard measures. The Indian exporters and trade experts have raised concerns, saying that the curbs could dilute gains under the India-UK Comprehensive Economic and Trade Agreement (CETA), particularly for steel and engineering exports.
Last May, India and the UK finalised their trade negotiations and signed the agreement in July 2025. The pact’s implementation was initially expected by May 2026. However, the tightened safeguards, according to Commerce Secretary Rajesh Agrawal, “have emerged as a concern”. “India, along with Brazil, Turkey, Japan, Korea, Switzerland, and Australia, has raised concerns at the WTO over the UK’s new restrictions on tariff-free steel imports,” Agarwal told reporter recently on the sidelines of an event.
Notably, the UK has extended safeguard measures on select steel imports. Starting from July 1, 2026, it will reduce tariff-free quotas by 60% and impose a 50% duty on shipments beyond the limit. The move comes amid rising global trade tensions, steel overcapacity, and the emergence of climate-linked trade barriers, such as the EU’s Carbon Border Adjustment Mechanism (CBAM).
Mixed signals to exporters
Experts said the measures could significantly curb access and dilute the pact’s expected gains. Pankaj Chadha, Chairman of the Engineering Export Promotion Council (EEPC) India, described the UK’s action as “not a fair deal”. “We have conveyed to the government that the UK cannot abruptly impose such tariffs after the FTA has already been signed,” Chadha said, adding that exporter sentiment has been negatively impacted by the uncertainty surrounding both the safeguard measures and the UK’s proposed carbon-related regulations.
