India-UK FTA implementation stuck due to carbon tax on steel; Scotch duties may be rolled back to rebalance pact

New Delhi: Commerce and industry minister Piyush Goyal Tuesday said he had "great conversations" with visiting UK secretary of state for business and trade Peter Kyle on ways to further strengthen bilateral economic ties.

The talks come in the backdrop of the British Parliament discussing the India-UK Comprehensive Economic and Trade Agreement (CETA), which was signed on July 24, 2025, but is currently facing a hurdle in its implementation due to Britain's new steel safeguard measures and carbon border adjustment mechanism (CBAM).

"Had great conversations on charting the next phase of India-UK economic engagement, advancing shared business priorities, and further strengthening our robust and forward-looking partnership," Goyal said in a social media post.


The UK earlier announced its decision to cut tariff-free steel imports and limit the overall quota to 60% with effect from July 1, 2026. Imports above these levels will attract a 50% tariff.

New Delhi could consider scaling back tariff concessions, called "rebalancing" in trade parlance, on Scotch whisky under the trade deal if the UK doesn't address its concerns on London's new steel safeguard measures, an official said.

In London, the Speaker of the House of Lords, Lord Forsyth of Drumlean, accepted an urgent Lords question (Private Notice Question) from Lord Sharpe of Epsom on the free trade agreement.

The question was on what assessment has been made by the UK government on the proposed steel import restrictions that may jeopardise the implementation of the trade deal and the steps being taken to protect British exporters, consumers, investment, and the benefits secured under that agreement.

Responding to the question, Lord Leong, the UK government spokesperson for the Department for Business and Trade, said the government has "absolutely no intention of undermining the benefits of the trade deal for any specific sector". Kyle's meeting with Goyal is also to ensure the FTA is implemented as soon as possible, he said.