New Delhi, June 17 (PTI) India's steel export interests have been safeguarded under the free trade agreement with the UK, with 85 per cent of the sector's outbound shipments remaining outside Britain's steel safeguard measures, an official statement said on Wednesday.

The two countries have announced that the comprehensive economic and trade agreement (CETA) will come into force from July 15.

The UK's steel safeguard measure became a sticking point in implementing the pact, which was signed on July 24, 2025.

"Demonstrating the collaborative strength of the India-UK CETA, India and the United Kingdom have successfully reached a landmark consensus to safeguard and promote bilateral steel trade," it said, adding "85 per cent of India's exports are out of the Steel measures. Along the lines under the Steel measures, India's interest has been protected through a mix of CSQ (country-specific quota), residual quota and access under Authorised Use Scheme (AUS)".

The statement added that following constructive deliberations regarding the UK's upcoming steel measures effective July 1, 2026, both sides mutually agreed to protect commercial interests, minimise market disruptions, and ensure an overall balanced and stable trading environment for exporters. ​ On June 2, Commerce and Industry Minister Piyush Goyal held talks with UK Secretary of State for Business and Trade Peter Kyle on this issue.

From July 1, 2026, the UK will limit tariff-free steel imports, reducing overall quota volumes by 60 per cent compared to the steel safeguard measure. Any imports above these levels will then face a 50 per cent tariff. The measure will apply to imports of steel products that can also be made in the UK.

Earlier, Britain had safeguard measures that also imposed import quotas. The new measures had reduced that quota.

In December 2023, the UK government also decided to implement its Carbon Border Adjustment Mechanism (CBAM) starting in 2027. ​ According to the economic think tank GTRI, India's exports worth USD 775 million to the UK may be affected by Britain's decision to introduce a carbon tax on products such as iron and steel, aluminium, fertiliser, and cement from 2027.

The UK, after the European Union (EU), will be the second economy to implement CBAM. The UK calls the move the Import Carbon Pricing Mechanism, which will initially focus on sectors such as iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass, and cement. ​ This tax could range from 14-24 per cent of the import value on full phase-out of free allowances under the ETS (Emissions Trading Scheme).

India's exports of iron and steel and products to the UK stood at USD 893.4 million in 2025-26. PTI RR SHM

Steel trade safeguards shape India-UK CETA implementation as quota limits and tariff rules are adjusted for exporters. India-UK CETA is set to enter into force from 15 July 2026, with steel trade arrangements designed to keep a substantial share of India's exports outside the UK's safeguard measures. India's interests are said to be protected through country-specific quota, residual quota and access under the Authorised Use Scheme, while the UK's new steel regime will limit tariff-free imports, reduce quota volumes and impose a higher tariff on imports above the permitted levels. The article also notes the UK's planned carbon border adjustment mechanism from 2027.