London, Jun 4 (PTI) The steel trade measure is being put in place to address a "serious threat" posed by global overcapacity to the UK's domestic steel-making capability, the British government informed Parliament during a debate on the free trade agreement (FTA) with India.

The India-UK Comprehensive Economic and Trade Agreement (CETA), signed off in July last year, has hit some implementation delays over the UK's steel import restrictions coming in from next month.

UK Secretary of State for Business and Trade Peter Kyle returned from talks with his counterpart, Commerce Minister Piyush Goyal, in New Delhi earlier this week to ramp up enforcement of the CETA.

"Given the strategic and economic importance of steel, the government cannot afford to leave the situation unaddressed," Lord Sonny Leong told the House of Lords, in his capacity as Government Whip in the Upper House.

"We use tariffs only as a last resort, and only in circumstances where we have no other choice. Without action, we risk losing domestic steel-making capability, which would mean that we could not meet critical infrastructure and defence needs without relying fully on imports," he said.

The Labour peer, responding to Opposition Conservatives, reiterated that Kyle's Delhi visit would help bring the UK-India FTA into force “as soon as possible”.

Tory peer Andrew Sharpe expressed concern that the steel measures risked jeopardising the implementation of the trade deal with India and called for the government to reverse the “steel tariffs outright, saving the landmark deal”.

"We import most of our steel from the EU [European Union]; 70 per cent of our steel imports are from overseas and 60 per cent from the EU, while India contributes only 5 per cent of the market," Leong pointed out.

The Upper Chamber also heard about some reports that New Delhi, as a result of the steel measures, might be reconsidering the significant slashing of Scotch whisky tariffs – from 150 per cent to 75 per cent immediately and down to 40 per cent in the longer term.

"We have signed a legal treaty with India that underpins the trade deal, and the liberalisation of whisky is a clear part of that. We will adhere to that and support the Scottish Whisky Association to ensure that India meets its obligation,” Leong stressed.

There are some concerns that aspects of the bilateral trade deal, expected to significantly boost the 48 billion pounds yearly two-way exchange, may have to be renegotiated as a result of the UK's steel tariffs coming in from July.

Kyle sought to dismiss these at a Department for Business and Trade (DBT) event at the City of London on Wednesday evening, stressing that both sides were “cracking on” at “breakneck speed” following his talks with Goyal on Tuesday. However, his reference to a timeline later than the May-June previously in play for the implementation of the India-UK CETA indicated some delay.

“If we implemented the deal in autumn this year, it would be the fastest implementation period of any trade deal that Britain has ever signed," he said.

Meanwhile, Foreign Secretary Yvette Cooper was the next senior British Cabinet member to arrive in India for talks with her counterpart, External Affairs Minister S Jaishankar, on Thursday.

The ministers are expected to have also covered the FTA coming into force, with Jaishankar posting on social media that they “reviewed ongoing progress in our cooperation focusing on trade, technology, supply chains, defence, climate, education and people to people ties”. PTI AMS

Steel import restrictions delay India-UK trade deal implementation amid concerns over domestic industry protection and tariff commitments. Steel import restrictions are being used as a protective trade measure against global overcapacity and the risk to domestic steel-making capability. The measures are linked to delays in implementing the India-UK Comprehensive Economic and Trade Agreement, while the treaty framework also includes whisky tariff liberalisation and continuing bilateral discussions on trade cooperation.