Tata Steel warns India-UK FTA could make UK manufacturing sites ‘unsustainable’ – Are British jobs at risk?

As the country’s biggest producer, Tata Steel recently warned that the India-UK Free Trade Agreement – formally known as the Comprehensive Economic and Trade Agreement (CETA) – could render the company’s British sites “unsustainable” while also threatening jobs in the UK, according to a Telegraph UK report. The business empire’s major warning was prompted by the new tariff quotas and import caps set by the government.

Around 600,000 tonnes of galvanised steel is made annually by Tata Steel’s Llanwern plant, near Newport in South Wales, UK. As part of the FTA pact between the two nations, India managed to negotiate an increased quota for duty-free exports of metallic-coated galvanised steel to the United Kingdom despite Britain previously imposing a safeguard levy on steel. Consequently, India’s allowance has risen from 98,000 to 125,000 tonnes per year.

As quoted by the Telegraph, Tata has warned the government that its current footprint in the UK may become unsustainable if these numbers are maintained. Cheaper imports, as a consequence, will end up impacting the British site’s output.

“On July 1, the EU implemented huge cuts to the UK’s tariff-free access to the single market, following similar action by other countries around the world,” a Tata spokesperson said, according to the UK media outlet. “The UK has had to adopt a similar approach, as without such measures the UK would have become a dumping ground for cheap imports diverted from other markets, with the likely consequence of domestic steelmaking becoming unviable.”

“Without the right balance of fairly-traded imports and domestic production, the foundations of the UK manufacturing base at large could be put at risk.”

Tata is further believed to have asserted that while it’s not against competition, the UK risks losing “the steelmaking capability that countless supply chains depend upon” under the current layout, which could end up “overwhelming domestic production to the point where UK manufacturing capacity becomes unsustainable.”

A bilateral deal with India is not the only tie-up with an Asian country threatening the UK’s domestic steel production. Vietnam’s quota has similarly been increased threefold from 51,000 to 174,000 tonnes per year.

Steel sector: What does the India-UK FTA entail?

Back in March, the United Kingdom introduced sweeping steel trade measures on 188 tariff lines, coming into effect from July 1, 2026. On those tariff lines, India’s steel exports to the UK were only about 14% ($137 million) of its total steel exports ($960 million). Given the key provisions under the recently formalised trade agreement between the two sides, Indian steel exporters’ interests were protected by easing the effect of the previously announced safeguard.

Consequently, the UK expanded tariff-free access across three critical product categories in this specific sector.

Category 1 (non-alloy and other alloy hot-rolled sheets and strips) saw the country-specific quota for India increase three times from 12,405 tonnes to 33,456 tonnes. It benefits Indian exporters and translates to ~9.45 lakh tonnes of dedicated trade volume, according to stats laid out in an official Press Information Bureau release.

Then, 9 commodity codes from the scope of the measure have been removed, improving market access under Category 28 (non-alloy wire). It ensures that 95% of India’s exports in this category remain completely restriction-free.

Thirdly, the ‘Expanded Residual Quotas’ provision makes way for India to secure expanded access in critical sub-categories. This includes Category 12B (non-alloy merchant bars and light sections) residual quota scaling up to 4,540 tonnes (from 468 tonnes) and Category 26 (other welded tubes) residual quota rising to 16,327 tonnes (from 10,809 tonnes).

All in all, serving as one of the biggest trade deals of modern times, the Comprehensive Economic and Trade Agreement (CETA) between India and the UK entailed that 99% of Indian goods coming to the UK and 90% of British goods entering India would be either duty-free or reduced in tariffs. With benefits spanning sectors on both sides, including automotive, manufacturing, consumer goods, creative industries, and medical technology, the deal is expected to boost bilateral trade by £25.5 billion, Indian GDP by £5.1billion, and UK GDP by £4.8billion every year in the long run, according to the UK government.

More about the India-UK FTA on the job front

While The Telegraph carried forth Tata Steel’s apprehensions about the increased steel imports from India impacting jobs at its British sites, another report by the Associated Chambers of Commerce & Industry of India (ASSOCHAM) suggested that the CETA could help create 7-10 lakh jobs across labour-intensive sectors in the next five years.

Without offering any work visa relaxations in the UK, the FTA focuses on business mobility, which allows professionals to temporarily travel to another country to deliver services as long as they meet fair requirements, such as salary thresholds, qualifications, a job offer or contract with a UK company, alongside sponsorship.

“‘Locking in’ routes and their rules means that the UK and India guarantee that specific business mobility routes will remain available under the trade agreement. As part of this agreement, we have locked in length of stay, giving businesses on both sides certainty,” states the official UK government website.

As a result, the deal ensures access for:

• Business visitors who travel to the UK or India for certain activities, such as attending a conference or meeting with potential investors
• Experienced employees and graduate trainees, also referred to as intra-corporate transferees, who transfer between a UK and Indian branch of their company.
• Investors who are employees of a business in the UK or India looking to establish and manage an investment in the partner country
• Indian or UK professionals travelling to supply services on a contract for up to a year (aka contractual service suppliers). This route is offered to all countries in the World Trade Organization (WTO) for employees of a company for a limited number of sectors.