In Faraday's equation:
$$ E = -\frac{d\Phi}{dt} \tag{1} $$
the flux $\Phi$ is the total magnetic flux passing through the loop. That is, there is some magnetic field $B$ passing through the loop and we integrate this field across the area of the loop to get the flux $\Phi$.
The magnetic field through the loop $B$ does not have to be constant across the loop. Indeed it can vary across the loop in any fashion you want and that makes no difference. All that matters in equation (1) is the total flux $\Phi$ through the loop and not how that flux is distributed across the loop.
So the answer is that yes in the diagram you have drawn an EMF will be induced even when the field $B$ is non-zero only in part of the loop. As long as the total flux $\Phi$ is changing with time an EMF will be induced.
w.r.t
meanswith respect to
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