UK trade minister in India; New Delhi eyes ‘scotch for steel’ rebalance

India could revisit tariff concessions offered to British exports such as Scotch whisky if the United Kingdom does not address New Delhi’s concerns over tightened steel safeguard measures, a government official indicated ahead of high-level bilateral talks in New Delhi.

The comments come as UK Secretary of State for Business and Trade Peter Kyle visits India for discussions with Commerce and Industry Minister Piyush Goyal on Tuesday, amid efforts by both countries to operationalise the India-UK free trade agreement signed last year.

At the centre of the emerging friction is Britain’s proposed tightening of steel import safeguards, including reduced tariff-free quotas and higher duties aimed at protecting its domestic industry.

Indian officials argue the measures could undermine market access for Indian steel exports even as both sides move towards implementing the trade pact.

“The ball is now in their court,” an Indian trade official said. “If they do not leverage the free trade agreement appropriately, we can always reconsider the concessions we offered.”

Officials indicated India has not taken a final call but may look at recalibrating concessions granted on select British products unless London addresses concerns around steel duties.

“We have to rebalance the FTA,” an official said, adding that goods such as Scotch whisky could come under consideration if the UK does not roll back its steel measures.

Scotch whisky was seen as one of Britain’s biggest gains under the India-UK Comprehensive Economic and Trade Agreement. Under the deal, India agreed to slash import duties on UK whisky and gin from 150% to 75% when the pact comes into force, with tariffs set to fall further to 40% over a 10-year period.

The broader trade agreement includes tariff reductions across sectors ranging from textiles and automobiles to alcoholic beverages, while expanding market access between the world’s fifth- and sixth-largest economies.

Both countries estimate the agreement could boost bilateral trade by an additional £25.5 billion by 2040.

Kyle’s meeting with Goyal in New Delhi  this morning was on deepening economic cooperation and expanding bilateral trade and investment ties, even as steel tensions cast a shadow over the next phase of the India-UK trade relationship.