India UK CETA Ensures Zero-Duty Access for 80% of Steel Exports with $893.4 Million in Trade

India and the UK are discussing Britain’s carbon border adjustment mechanism, even as the India-UK Comprehensive Economic and Trade Agreement came into force on Wednesday. Commerce Secretary Rajesh Agrawal said India had preserved market access for its domestic steel sector under the free trade agreement.

Why Is the UK Carbon Tax Still Under Discussion?

Britain’s carbon border adjustment mechanism, or CBAM, remained an unresolved issue during negotiations. CBAM is a proposed levy on imports based on emissions intensity, designed to align imported goods with domestic carbon pricing rules.

Agrawal said the regulation is still under development and has not yet come to fruition. Once free allowances under the UK Emission Trading System are fully phased out, the tax could range from 14% to 24% of import value.

How India-UK CETA Protects Steel Market Access

India’s steel exporters were a central focus in negotiations because quota limits and emissions-linked charges directly affect shipment economics. Agrawal said India’s quotas under the pact are comparatively higher than those extended to other UK trading partners.

The remaining 20% will be covered through negotiated quotas, which Agrawal said are sufficient to maintain and potentially expand shipments.

What the Pact Changes for Goods Trade Starting from Wednesday?

From Wednesday, 98% of goods originating in India can enter Britain without duty. Agrawal described the agreement as a gold standard pact because of its sectoral breadth and reduction in both price and non-price barriers.

Which Indian Sectors Gain Duty-Free UK Entry?

Several categories that employ large workforces will now enter Britain at zero rate. Earlier UK charges on these products ranged from 4% to 16%:

• Garments, textiles, and footwear
• Carpets and processed foods
• Cereals, fruits, vegetables, and spices
• Fish and meat products

The agreement is also expected to help India expand its share in tobacco cigarettes, man-made fibre jerseys, and synthetic trousers.

Which Products Were Kept Outside Tariff Concessions?

Both countries retained protection for politically or commercially sensitive categories.

India excluded from concessions: Fresh apples, walnuts, whey and modified whey, blue-veined cheese and selected seed varieties, gold bars and smartphones.

The UK excluded: Chicken, pork, rice, and sugar.

Silver Imports Get Stricter Origin Rules

Britain supplies 45.4% of India’s total refined silver bar imports, making it the largest source of that commodity. India currently applies a 15% levy on silver, split between 10% basic customs duty and 5% agriculture infrastructure and development cess.

The agreement includes stringent rules of origin for silver, which determine whether consignments qualify for preferential treatment.

Final Outlook: The $100 Billion Trade Target

Agrawal said the target is to reach $100 billion within the next three to four years. Duties as high as 12% are being eliminated under the pact, with the broader ambition of deeper market access and wider coverage across goods and services categories.