India Seeks Steel Export Exemptions as UK’s New Tariffs Threaten Trade Deal

India is seeking exemptions for selected steel products from the United Kingdom’s new import restrictions, as the measures threaten to complicate the implementation of the bilateral trade agreement signed by the two countries in July 2025.

The UK announced its new steel safeguard regime in March 2026, with the measures scheduled to take effect on July 1. The framework reduces tariff-free steel import quotas by 60% and imposes a 50% tariff on shipments exceeding the prescribed limits.

New Delhi is pushing for product-specific relief, particularly for steel products with significant export exposure to the British market and those linked to micro, small and medium enterprises (MSMEs), government and industry sources said.

The proposed exemptions cover around six product categories, including hot-rolled steel sheets and strips, stainless steel bars and light sections, stainless steel wire rods, merchant bars, gas pipes and other welded pipes.

India is also seeking exemptions or dedicated quota allocations based on its average export volumes over the past three years. Industry representatives argue that established trade flows should be protected from sudden changes in import restrictions.

A government official said discussions between New Delhi and London were continuing, with both sides exchanging proposals. India is reluctant to allow 88 steel product lines across different categories to face the new regime without seeking relief.

The dispute has emerged as a key sticking point in implementing the India–UK trade agreement, which was formally signed in July 2025 and is awaiting implementation.

The potential impact is significant for Indian steel exporters seeking to maintain access to the UK market. Government data show that India’s iron and steel exports to the UK were part of a broader export base that has expanded in recent years. India’s total iron and steel exports stood at $566.69 million in Financial Year 2025–26, compared with $526.96 million in Financial Year 2024–25 and $383.82 million in Financial Year 2023–24.

Industry sources have highlighted the exposure of smaller exporters to the proposed restrictions, particularly in product categories where MSMEs have a meaningful presence. Reduced quotas and higher duties could affect their competitiveness if exemptions are not secured.

For India, the steel issue is being treated as part of the wider trade negotiations rather than an isolated dispute. The outcome of the ongoing discussions could determine how key steel products are treated under the new UK regime and influence the next steps towards operationalising the bilateral agreement.

With both countries continuing negotiations, exporters are awaiting clarity on product-specific exemptions and quota arrangements.