India secures steel market access under UK FTA; exporters to avail benefits from 15 July

New Delhi: India has secured safeguards for its steel exports under the India-UK free trade agreement (FTA) and remains confident that exporters will not lose market access despite the UK’s new steel trade measures, according to a top government official.

The official further said that nearly 85% of India’s steel exports to the UK remain outside the scope of Britain’s steel trade measures that are scheduled to take effect from 1 July. Of India’s steel shipments to the UK, only about $137 million in exports are subject to the safeguard regime. India has secured protection through a combination of country-specific quotas, residual quota allocations and access under the Authorised Use Scheme.

Steel safeguards were among the key outstanding issues during implementation. India and the UK have now arrived at a mutually agreed arrangement that preserves India’s access to the market in UK. “India will not lose market access. India will retain market access even in the affected part,” one of the persons cited above said.

The development comes as India and the UK announced that the Comprehensive Economic and Trade Agreement (Ceta) and the accompanying social security pact will come into force on 15 July, following the completion of ratification procedures on both sides. Officials said customs notifications and implementation-related processes are being finalized to ensure exporters can avail tariff concessions right from the first day.

The agreement is expected to provide Indian exporters an additional tariff advantage of 7–10% in the UK market, placing India on par with several countries that already enjoy preferential access. The pact will bring more than 99% of India’s exports to the UK under zero-duty coverage in a market worth over $500 billion.

CBAM watch

Interestingly, India exported 137,100 tonnes of steel to the UK in fiscal year 2026 (FY26), which was just 0.085% of the country’s total finished steel production of 161.7 million tonnes, according to the provisional data from the Joint Plant Committee.

The accompanying social security agreement is also expected to deliver significant benefits. The exemption period for social security contributions has been extended from three years to five, benefiting more than 75,000 Indian workers and over 900 Indian companies operating in the UK. Officials estimate savings of more than $500 million, with 90–95% of Indian professionals working in the UK for Indian employers expected to benefit.

The deal is projected to boost UK gross domestic product (GDP) by £4.8 billion and increase bilateral trade by £25.5 billion in the long run. It also provides for tariff reductions on products such as whisky, automobiles, cosmetics and a range of UK exports, while the UK will lower duties on Indian goods, including apparel, footwear and food products.

Responding to concerns over the UK’s proposed carbon border adjustment mechanism (CBAM), officials noted that the framework is yet to be finalized and discussions within the UK are still underway. “Once the final picture emerges, India will engage and negotiate,” an official said. The trade agreement contains mechanisms to address emerging trade issues, and both sides have agreed that there is no need to reopen the pact.

This assumes significance as India’s steel sector continues to grapple with the European Union’s (EU) CBAM, which began imposing carbon-related charges on imports of steel and other emissions-intensive products in 2026. During India-EU trade negotiations, New Delhi sought relief from the mechanism, arguing that it could adversely affect the competitiveness of Indian exports.

However, the EU has maintained that the CBAM will remain unchanged and that no country-specific exemption can be granted under its framework. In contrast, India and the UK have reached a mutually acceptable arrangement under Ceta to preserve market access for Indian steel exports despite Britain’s safeguard measures, while discussions on the UK’s proposed CBAM are ongoing and the framework has not yet been finalized, according to the top official.