India and the UK on Tuesday discussed the key issues delaying the implementation of the Comprehensive Economic and Trade Agreement (CETA), as both sides reviewed progress under the trade pact signed in July last year.The issues came up during a meeting between Commerce Secretary Rajesh Agarwal and UK Permanent Secretary Amanda Brooks.“Engaged in extensive discussions with UK Permanent Secretary Ms. Amanda Brooks on #IndiaUKCETA implementation.“Took stock of progress and worked through the sticking points, while exploring new pathways under #IndiaUKCETA #GlobalTrade #EconomicPartnership aligned with #ViksitBharat. Reaffirmed commitment to regular engagement with @UKGovScotland @TradeGov for effective implementation,” Agarwal said in a social media post.Britain’s steel safeguard measure and carbon border adjustment mechanism (CBAM) have emerged as major issues delaying the implementation of the agreement.According to government sources, India may rebalance some duty concessions offered under the pact on certain British products, including Scotch whisky, if these concerns are not addressed.From July 1, 2026, the UK will limit tariff-free steel imports, reducing overall quota volumes by 60 per cent compared to the existing steel safeguard mechanism. Imports exceeding the quota will attract a 50 per cent tariff.The measure will apply to steel products that can also be manufactured in the UK. Earlier safeguard measures had also imposed import quotas, but the new framework reduces those quotas further.The UK government had also announced in December 2023 that it would implement its Carbon Border Adjustment Mechanism (CBAM) from 2027.Separately, Commerce and Industry Minister Piyush Goyal held talks with UK Secretary of State for Business and Trade Peter Kyle on strengthening bilateral economic ties.“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.According to economic think tank GTRI, India’s exports worth USD 775 million to the UK could be impacted by Britain’s decision to impose a carbon tax on products such as iron and steel, aluminium, fertiliser and cement from 2027.After the European Union, the UK will be the second major economy to implement a CBAM-type mechanism. The measure, referred to by Britain as an import carbon pricing mechanism, will initially cover sectors including iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass and cement.The tax could range between 14 per cent and 24 per cent of the import value following the full phase-out of free allowances under the Emission Trading System (ETS).India’s exports of iron and steel and related products to the UK stood at USD 893.4 million in 2025-26, forming a significant part of the country’s total merchandise exports to Britain, which amounted to USD 13.4 billion.Under the trade pact, India has agreed to reduce duties on UK whisky and gin from 150 per cent to 75 per cent initially and further to 40 per cent in the tenth year of the agreement.Scotch whisky brands such as Johnnie Walker, Chivas Regal and The Glenlivet are among the most popular in India, with Johnnie Walker remaining one of the country’s best-selling Scotch labels.
