New Delhi: Tata Steel UK has reportedly warned the British government that the India-UK Free Trade Agreement (FTA) could threaten the long-term viability of its UK operations by allowing higher volumes of cheaper steel imports from countries including India, Vietnam and China.
According to reports, the company has expressed concerns over the revised tariff quota system, saying the increased flow of lower-cost steel into the UK market could put domestic manufacturers under pressure and weaken the country’s steel industry.
The warning focuses on Tata Steel’s Llanwern plant in South Wales, which manufactures around 600,000 tonnes of galvanised steel annually. Under the India-UK FTA, India’s duty-free export quota for metallic-coated galvanised steel has increased from 98,000 tonnes to 125,000 tonnes per year.
Tata Steel has reportedly told the UK government that if imports continue to rise under the current arrangement, maintaining its existing manufacturing footprint in Britain could become commercially unsustainable. The company said domestic production could struggle to compete if cheaper imports continue to expand.
It also cautioned that while it supports fair competition and open trade, the UK risks losing critical steelmaking capacity that supports several industrial supply chains if the balance between imports and domestic production is not maintained.
The India-UK FTA seeks to reduce or eliminate tariffs on Indian exports to the UK while lowering duties on around 90% of UK exports to India. Reports indicate that the agreement has significantly increased import quotas for some countries. Vietnam’s annual duty-free quota for metallic-coated galvanised steel exports has risen from 51,000 tonnes to 174,000 tonnes, while India’s quota has increased from 98,000 tonnes to 125,000 tonnes.
According to reports, Tata Steel has also warned that safeguard duties of up to 50% may be imposed if imports exceed prescribed thresholds. However, it maintains that the revised quota system could still create significant challenges for the UK’s domestic steel industry if left unchecked.
