India and the United Kingdom are working to resolve a fresh dispute over steel imports that has delayed the implementation of their long-anticipated Free Trade Agreement (FTA), according to official and media reports.
The deal, which was expected to be operational by May 2026, has hit a hurdle after the UK introduced new steel safeguard measures that tighten import access. The changes include sharply reduced tariff-free quotas and higher duties on steel imports exceeding those limits.
Indian officials say these restrictions were not anticipated during FTA negotiations and are now affecting the final rollout of the agreement. The issue has become a key sticking point in otherwise advanced discussions between the two countries.
Commerce Secretary Rajesh Agrawal said both sides are actively engaged in talks and are trying to find a “unique and creative solution” to address the problem. He added that India and the UK remain close to operationalising the broader trade pact despite the setback.
The UK’s new steel regime, set to take effect from July 2026, will significantly cut tariff-free steel import volumes and impose steep duties on excess shipments. The policy is aimed at protecting domestic steel producers but has raised concerns among trading partners, including India.
Despite the dispute, both governments have stressed that the FTA remains on track overall. Negotiators are now focusing on bridging differences related to steel trade rules so the agreement can be implemented without further delay.
For India, the concern is that reduced access for steel exports could weaken expected gains from the FTA, particularly for its metals and engineering sectors. The agreement was designed to improve market access and boost bilateral trade across goods and services.