India’s FTAs With UK, UAE, Switzerland Reflect New Trade Strategy: GTRI
India's latest Free Trade Agreement (FTA) with the United Kingdom marks a turning point in the country’s trade policy, according to a detailed report by the Global Trade Research Initiative (GTRI). Following similar agreements with the UAE and Switzerland, the India-UK deal reflects a clear trend of India opening up previously protected sectors, indicating a more liberal approach to international trade negotiations.
The GTRI report noted that India is gradually stepping into areas once considered off-limits in FTA discussions. These include government procurement, intellectual property rights, the automobile sector, digital and data services, and professional services. According to the report, “India's recent trade deals—with the UAE, Switzerland, and now the UK—are following a pattern. Each agreement goes deeper into sensitive areas, opening up new sectors, and giving up control over important policy spaces.”
In the UK agreement, India has made notable policy concessions, especially in areas such as domestic regulations and policy space—issues that India had traditionally been cautious about. These changes could influence future negotiations with trade giants like the United States and the European Union.
Automobile Sector: A First In Tariff Concessions
One of the most groundbreaking features of the India-UK FTA is the inclusion of a Tariff Rate Quota (TRQ) for UK-manufactured passenger vehicles. This marks India’s first-ever automobile-related tariff concession under any trade pact.
The deal will see India reduce import duties on high-end petrol (above 3000 cc) and diesel cars (above 2500 cc) from over 100 per cent to 10 per cent over a 15-year period, but only for a limited number of vehicles. Starting with an annual quota of 10,000 units, the cap will gradually rise to 19,000 units by year five.
This concession benefits British luxury brands such as Jaguar and Land Rover—owned by India’s Tata Motors—and could prompt similar demands from other key trading partners like Japan, South Korea, and the EU.
Opening Up Public Procurement
In a major policy shift, India has agreed to open approximately 40,000 high-value government procurement contracts to UK firms. These include tenders issued by central ministries and departments in sectors such as transport, green technology, and infrastructure.
This move marks a departure from India’s longstanding protectionist stance on public procurement and could set the stage for broader reforms in how India manages government contracts.
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Intellectual Property: Binding Constraints Introduced
The agreement also includes significant changes in the realm of intellectual property rights. India has agreed to include language emphasizing “adequate remuneration” to patent holders, aligning its domestic policies more closely with Article 31(h) of the TRIPS Agreement.
While this language already exists in global IP frameworks, its explicit inclusion in a bilateral agreement makes it legally binding and could restrict India’s ability to issue compulsory licenses during public health emergencies.
Services Sector: Expanded Access For UK Firms
The India-UK deal also opens major segments of India’s services sector to British companies. These include fields such as accounting, auditing, financial services (with an FDI cap of 74 per cent in insurance), telecom (100 per cent FDI permitted), environmental services, and air transport support.
British service providers can now operate in India without a physical presence and will receive national treatment—ensuring they are treated on par with Indian companies. Furthermore, India has agreed to recognize UK professional qualifications in areas like law and accounting, though the legal services market remains off-limits for now.
The report claims that the India-UK agreement goes beyond a standard trade deal. It signals a strategic shift in how India is positioning itself in global trade, gradually embracing openness in sectors once heavily guarded.
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