{"id":77246,"date":"2026-06-17T18:17:55","date_gmt":"2026-06-17T12:47:55","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=77246"},"modified":"2026-06-17T18:22:25","modified_gmt":"2026-06-17T12:52:25","slug":"steel-quotas-carbon-barriers","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/17-06-2026\/steel-quotas-carbon-barriers","title":{"rendered":"Navigating Steel Quotas and Carbon Barriers in India\u2013UK FTA"},"content":{"rendered":"\n<p><strong>Syllabus: GS2\/International Relations, GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India is pushing for a steel quota in the UK market worth nearly <strong>$900 million <\/strong>under the bilateral free trade agreement (FTA) signed in <strong>2025<\/strong> in a bid to resolve the ongoing row over steel curbs announced by the UK.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Tightened Steel Import Restrictions by United Kingdom<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The United Kingdom announced<strong> revised steel safeguard measures <\/strong>that will come into effect from July 1, 2026.<\/li>\n\n\n\n<li>The country has<strong> reduced tariff-free import quotas for steel products<\/strong> and <strong>increased tariffs on imports <\/strong>exceeding the quota from <strong>25% to 50%.<\/strong><\/li>\n\n\n\n<li>The UK government has justified these measures as necessary <strong>to protect its domestic steel industry <\/strong>from global overcapacity and trade diversion.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Concerns Raised by India&nbsp;<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India has argued that the <strong>proposed quotas are significantly lower<\/strong> than its current export levels.<\/li>\n\n\n\n<li>India&#8217;s exports of iron, steel, and steel products to the UK amounted to approximately <strong>$893.4 million in 2025\u201326.<\/strong><\/li>\n\n\n\n<li><strong>Impact on Indian Industry: <\/strong>This severely <strong>hits Indian MSME exporters and high-exposure steel products<\/strong> (such as stainless steel wire rods and welded pipes), which make up a significant portion of India&#8217;s steel exports to the UK.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-group has-background\" style=\"background-color:#fff2cc\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p><strong>Tariff-Rate Quotas (TRQ)<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>TRQ is a <strong>two-tiered trade policy<\/strong> used to regulate imports. It allows a specific volume of a product to be <strong>imported at a reduced or zero tariff rate.\u00a0<\/strong><\/li>\n\n\n\n<li>Once that volume limit is reached, any additional imports face a significantly higher standard tariff rate.<\/li>\n\n\n\n<li>TRQs emerged as part of the<strong> Uruguay Round Agreement on Agriculture<\/strong> under the <strong>World Trade Organization<\/strong>, which sought to convert non-tariff barriers into more transparent and measurable tariff-based measures, a process known as tariffication.<\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The UK&#8217;s Carbon Border Adjustment Mechanism (CBAM)<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The United Kingdom plans to introduce a <strong>Carbon Border Adjustment Mechanism <\/strong>from <strong>January 1, 2027.<\/strong><\/li>\n\n\n\n<li>The initial sectors covered include <strong>iron and steel, aluminium, cement, fertilizers, and hydrogen.<\/strong><\/li>\n\n\n\n<li><strong>Objectives of CBAM:<\/strong>\n<ul class=\"wp-block-list\">\n<li>The mechanism seeks to prevent carbon leakage, where industries relocate production to countries with less stringent environmental regulations.<\/li>\n\n\n\n<li>It aims to ensure fair competition between domestic producers and foreign exporters.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Concerns for India:\u00a0<\/strong>\n<ul class=\"wp-block-list\">\n<li>India&#8217;s steel sector is <strong>relatively carbon-intensive <\/strong>compared to many developed economies. Indian exporters may face <strong>additional compliance costs<\/strong> and carbon-related charges.<\/li>\n\n\n\n<li>CBAM undermines the principle of<strong> Common But Differentiated Responsibilities (CBDR)<\/strong> in climate negotiations.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>India&#8217;s Transition Towards Green Steel Production<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India is pursuing decarbonisation of the steel sector to achieve its <strong>net-zero emission intensity target by 2070<\/strong> through energy efficiency, renewable energy adoption, green hydrogen, scrap recycling, and <strong>Carbon Capture, Utilisation and Storage (CCUS) technologies.<\/strong><\/li>\n\n\n\n<li><strong>In 2024<\/strong>, India became the <strong>first country to introduce an official Green Steel Taxonomy<\/strong>, defining <strong>green steel<\/strong> as steel produced with emission intensity below <strong>2.2 tonnes of CO\u2082 equivalent per tonne<\/strong> of finished steel.\n<ul class=\"wp-block-list\">\n<li><strong>By March 2026, 89 steel units<\/strong> had received green steel certification covering 12.34 MT production.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India and the United Kingdom should <strong>negotiate a mutually acceptable steel quota <\/strong>that reflects historical trade volumes.<\/li>\n\n\n\n<li>India should accelerate the adoption of <strong>green steel technologies and low-carbon manufacturing <\/strong>processes.<\/li>\n\n\n\n<li>The dispute provides an opportunity to establish effective <strong>dispute-resolution mechanisms<\/strong> under the FTA.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-group has-background\" style=\"background-color:#ebecf0\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p><strong>India\u2019s Global Position in Steel Sector<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India\u2019s share in global crude steel production increased from <strong>5.2% in 2014 to 7.9% in 2024<\/strong>, reflecting its growing global competitiveness.<\/li>\n\n\n\n<li>According to the <strong>World Steel Association,<\/strong> India is also the world\u2019s <strong>second-largest consumer of finished steel.<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Finished steel consumption<\/strong> in India increased from 77 million tonnes (MT) in 2014\u201315 to <strong>163.7 MT in 2025\u201326.<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Top destinations for India\u2019s finished steel exports <\/strong>in March 2026 were Vietnam, Belgium and Taiwan, comprising <strong>more than 50% <\/strong>of India\u2019s total finished steel exports.<\/li>\n\n\n\n<li>India aims to achieve<strong> 500 MT steel production <\/strong>capacity by <strong>2047<\/strong> as part of the long-term industrial growth strategy.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"c4d5df\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"529\" height=\"364\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/06\/image-126.png\" alt=\"india\u2019s global position in steel sector\" class=\"not-transparent wp-image-77250\" style=\"--dominant-color: #c4d5df; width:506px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/06\/image-126.png 529w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/06\/image-126-300x206.png 300w\" sizes=\"auto, (max-width: 529px) 100vw, 529px\" \/><\/figure>\n<\/div><\/div><\/div>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/india-seeks-900-million-steel-quota-to-end-uk-trade-deal-logjam-10743273\/#:~:text=India%20is%20pushing%20for%20a\" target=\"_blank\" rel=\"noopener\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong> Context <\/strong><\/p>\n<li class=\"ms-5\"> India is pushing for a steel quota in the UK market worth nearly $900 million under the bilateral free trade agreement (FTA) signed in 2025 in a bid to resolve the ongoing row over steel curbs announced by the UK. <\/li>\n<p><\/p>\n<p><strong> Tightened Steel Import Restrictions by United Kingdom <\/strong><\/p>\n<li class=\"ms-5\"> The United Kingdom announced revised steel safeguard measures that will come into effect from July 1, 2026. <\/li>\n<li class=\"ms-5\"> The country has reduced tariff-free import quotas for steel products and increased tariffs on imports exceeding the quota from 25% to 50%. <\/li>\n<p><a href=\" https:\/\/www.nextias.com\/ca\/current-affairs\/17-06-2026\/steel-quotas-carbon-barriers \" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-77246","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/77246","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=77246"}],"version-history":[{"count":4,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/77246\/revisions"}],"predecessor-version":[{"id":77252,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/77246\/revisions\/77252"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=77246"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=77246"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=77246"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}