India Threatens Whisky Tariffs Over UK Steel Trade Barriers

The Government of India has threatened to revoke tariff concessions on British Scotch whisky and gin if the United Kingdom rolls back tightened steel safeguard measures. Under the Comprehensive Economic and Trade Agreement (CETA) signed in July 2025, India agreed to reduce whisky tariffs from 150% to 75%, eventually dropping to 40% over ten years. New Delhi argues that Britain's decision to limit tariff-free steel imports to a 60% quota starting July 1, 2026, and its planned 2027 Carbon Border Adjustment Mechanism (CBAM) undermine market access and could impact USD 775 million of Indian exports.

To address these irritants, UK Business and Trade Secretary Peter Kyle visited New Delhi on June 2 to meet with Indian Commerce and Industry Minister Piyush Goyal. The officials aimed to fast-track the operationalization of the CETA, a landmark deal that would liberalize 99% of UK tariffs and 90% of Indian tariffs to support a bilateral trade relationship currently valued at £48 billion annually.

Following Kyle's visit, UK Foreign Secretary Yvette Cooper arrived in New Delhi on June 3 for a two-day official visit. Cooper is scheduled to meet with Prime Minister Narendra Modi and External Affairs Minister S. Jaishankar to review bilateral relations, coordinate on security and defense, and advance the Vision 2035 framework. Both nations view the partnership as critical for economic stability amid global disruptions, including the blockade of the Strait of Hormuz.