$$\nabla \times \vec{E} =-\frac{\partial{\vec{B}}}{\partial{t}}$$
Applying Stokes' theorem:
$$\oint_{loop} \vec{E} \cdot d\vec{l}=\int_S -\frac{\partial{\vec{B}}}{\partial{t}} \cdot d\vec{S}$$
Where $S$ is any open surface with the loop as its perimeter. Considering the simplicity of the derivation I struggle to see why this shouldn't hold in all cases. However, consider the setup described below:
A uniform magnetic field parallel to the $z$ axis crosses the $x$-$y$ plane in a circular region radius $r$ centred at the origin. A wire loop of radius $R>r$ is also centred at the origin in the $x$-$y$ plane. The field changes with time (but remains parallel to the $z$ axis). Is an EMF induced in the loop?
According to Faraday's law as expressed above, the answer surely should be yes. The integral on the right hand side will not return 0, so therefore the left hand side cannot be 0 and an EMF should be induced in the coil.
Physically, however, the answer surely should be no. An EMF is induced in the wire ultimately because of the magnetic force that acts on the charges in the loop itself, moving them along the loop and producing a potential difference. If the loop itself is not in the magnetic field, then how can the field exert a force on the charges in it?
There is an error in reasoning somewhere here. Where am I going wrong?