NEW DELHI: India has managed to secure a virtual exemption from the UK’s controversial steel safeguard tariff measures, paving the way for the implementation of the Comprehensive Economic and Trade agreement (CETA) between the two countries starting July 15.
The measures, set to come into force from July 1, were expected to impact 15% of India’s commodity exports to the UK while 85% were exempt. Sources said that through a combination of measures covering country-specific quotas and “other instruments,” almost all Indian products will get duty-free access to the UK, once the CETA is in force, sources said.
India exported steel goods worth nearly $ 840 million to the UK in FY26.
In all 188 items that accounted for $ 137 million worth of steel exports from India to UK (in FY26) were covered by safeguard measures but now these products too will get duty-free market access, sources said.
Other than country-specific quotas, there is a mechanism of residual quotas. It is generally available on a first-come first-serve basis and countries compete on that. Other than that, the Authorised Use Scheme (AUS) will be available to Indian exporters. Under AUS, the quota is made available upon importers’ request.
The steel safeguard measures were announced by the UK in March to protect its local steel industry. Through these steps, the UK slashed overall tariff-free import quota volumes by 60% compared to the previous safeguard regime.
Imports exceeding the permitted quota levels would face 50% tariff, double the current level. The announcement of the measures came even as both sides were close to implementation of the CETA.
The talks were reopened and an agreement on exemption to India was reached on Wednesday morning and by evening Prime Minister Narendra Modi and UK Prime Minister announced July 15 as the date for implementation of CETA.
Even as the talks were on, India expressed concern over the UK’s proposal on steel safeguard at a meeting of the World Trade Organisation (WTO)’s Council for Trade in Goods. The council oversees the implementation of all agreements relating to trade in goods.
“WTO is a parallel discussion but the issue will be settled in the light of what finally gets settled in the bilateral negotiation,” sources said.
The issue of a new taxation structure on steel imports was raised at the meeting of the council by Korea and Japan on the UK’s move. China, Brazil, Turkiye and Australia were others who opposed the move and India expressed its concern.
Source: The Financial Express
