India Warns UK Steel Curbs Could Jeopardise Scotch Whisky Tariff Deal

India has warned that it could reconsider key tariff concessions granted to British exports under the UK–India Free Trade Agreement (FTA) if the UK proceeds with planned restrictions on steel imports, raising fresh uncertainty over one of Britain's most significant post-Brexit trade deals.

The warning comes ahead of trade talks between UK Trade Secretary Peter Kyle and Indian Commerce Minister Piyush Goyal, as both countries work towards implementing the agreement signed in 2025.

At the centre of the dispute are new UK steel safeguard measures scheduled to take effect from July. The proposals would reduce tariff-free steel import quotas and impose higher duties on shipments that exceed those limits. India argues that the changes could undermine the market access benefits its exporters expected to receive under the trade agreement.

An Indian trade official indicated that New Delhi could revisit concessions it offered during negotiations if its concerns are not addressed. Among the most prominent of those concessions was a significant reduction in tariffs on Scotch whisky imports.

Under the trade deal, India agreed to cut tariffs on Scotch whisky from 150% to 75% when the agreement enters into force, with duties falling further to 40% over the following decade. The reductions were widely viewed as one of the UK's biggest commercial victories in the negotiations, particularly for Scotland's whisky industry, which has long sought improved access to one of the world's largest whisky markets.

The UK government has described the FTA as a major economic opportunity that could strengthen trade ties between the world's fifth- and sixth-largest economies. Both sides have projected that the agreement could boost bilateral trade by an additional £25.5 billion by 2040.

However, India's concerns over steel have emerged as one of the first significant obstacles to implementation. New Delhi, alongside several other countries including Brazil, Japan, South Korea and Australia, has already raised objections to the UK's proposed steel measures at the World Trade Organization. Indian officials argue that the new quotas and tariffs would create uncertainty for exporters and dilute some of the expected gains from the trade pact.

The dispute highlights the increasingly complex balance governments face between protecting domestic industries and advancing free trade commitments. While the UK has argued that steel safeguards are necessary to shield its domestic sector from surging imports, trading partners view the measures as potentially inconsistent with the spirit of newly negotiated trade agreements.

For British exporters, particularly Scotch whisky producers, the outcome of the discussions could prove significant. India is considered one of the industry's most promising growth markets, and the tariff reductions agreed under the FTA were expected to improve competitiveness and support long-term export growth.

Although UK officials have indicated that steel is not formally part of the current implementation discussions, pressure is mounting on both sides to find a solution that preserves the benefits of the wider agreement and avoids a broader trade dispute.

With implementation of the deal approaching, businesses on both sides will be watching closely to see whether negotiators can prevent a disagreement over steel from spilling into other sectors and delaying the expected gains from the landmark trade pact.