India and the UK are set to discuss Britain’s steel safeguard measures and proposed Carbon Border Adjustment Mechanism (CBAM) this week, with the two issues emerging as key hurdles in the implementation of the bilateral free trade agreement signed last year, PTI reported citing sources.The issues are expected to figure prominently during the visit of UK Minister of State for Trade Policy Chris Bryant on June 2. Bryant is scheduled to hold bilateral talks with Commerce and Industry Minister Piyush Goyal.According to sources, the steel safeguard measures and CBAM have become a “sticking point” in the implementation of the Comprehensive Economic and Trade Agreement (CETA), signed on July 24, 2025.Both issues will be discussed during the UK minister’s visit, the sources said, indicating that the rollout of the pact could remain difficult until a resolution is reached.From July 1, 2026, the UK will limit tariff-free steel imports by reducing overall quota volumes by 60 per cent compared to the existing steel safeguard framework. Imports beyond those quotas will attract a 50 per cent tariff.The measure will apply to steel products that can also be manufactured within the UK. Britain already had safeguard measures involving import quotas, but the new regime further reduces those quotas.Another major concern for India is Britain’s decision to implement a Carbon Border Adjustment Mechanism from 2027.According to economic think tank GTRI, India’s exports worth USD 775 million to the UK could be impacted by the proposed carbon tax on products such as iron and steel, aluminium, fertiliser and cement.After the European Union, the UK will become the second major economy to implement a CBAM-type mechanism. The UK refers to it as an import carbon pricing mechanism and plans to initially cover sectors including iron, steel, aluminium, fertiliser, hydrogen, ceramics, glass and cement.The tax could range between 14 per cent and 24 per cent of the import value after the full phase-out of free allowances under the Emission Trading System (ETS).During a visit to London in 2025, Goyal had flagged India’s concerns over the proposal and conveyed that New Delhi may consider retaliatory measures if Britain proceeds with the carbon tax plan.India’s exports of iron and steel and related products to the UK stood at USD 893.4 million in 2025-26, forming a significant portion of the country’s total merchandise exports of USD 13.4 billion to Britain.Sources also said India could explore rebalancing the impact of the UK’s steel measures against the tariff concessions offered to British Scotch whisky under the trade pact.Under the CETA, India agreed to reduce import duties on UK whisky and gin from 150 per cent to 75 per cent initially and further to 40 per cent in the tenth year of the agreement.Popular Scotch whisky brands in India include Johnnie Walker, Chivas Regal and The Glenlivet, with Johnnie Walker among the country’s best-selling Scotch labels.