India’s Game-Changing Trade Deals with UAE, Switzerland & UK Mark Major Policy Shift: GTRI

India's recent trade agreements with the United Arab Emirates (UAE), Switzerland, and the United Kingdom (UK) represent a significant shift in India's approach to free trade agreements (FTAs), according to the Global Trade Research Initiative (GTRI). These deals mark India's move towards opening sensitive sectors previously shielded from foreign access, signaling a new era in its trade policy.

The India-UK trade deal, concluded in May 2025 after over three years of negotiation, is particularly notable for breaking longstanding barriers around domestic regulation and policy space. It introduces India's first-ever automotive tariff concession under an FTA, reducing customs duties on large-engine petrol and diesel passenger cars from over 100% to 10% over 15 years, though under a quota system starting at 10,000 vehicles annually. 

 

This preferential access benefits UK brands like Jaguar Land Rover, owned by Tata Motors, and could set a precedent inviting similar demands from other countries such as Japan, the EU, South Korea, and the US.

A major policy shift is evident as India has for the first time opened approximately 40,000 high-value government contracts to UK bidders in sectors such as transport, green energy, and infrastructure. This signals a departure from India's traditionally protectionist stance in public procurement.

In intellectual property rights, the UK agreement includes language that could restrict India's ability to issue compulsory licenses—a crucial tool during public health emergencies—by requiring "adequate remuneration" to patent holders. While consistent with global TRIPS standards, embedding this in a bilateral agreement elevates it to a binding commitment, potentially limiting India's policy flexibility domestically.

The agreement also liberalizes India's services sector for UK firms, granting national treatment to British companies in areas including accounting, auditing, financial services (with FDI capped at 74% in insurance), telecom (with 100% FDI allowed), environmental services, and auxiliary air transport. UK professionals' qualifications in law and accounting are recognized, although legal services markets remain closed.

Similar expansive openness was observed in India's recent deals with the UAE and Switzerland, with each successive agreement delving deeper into sensitive sectors such as government procurement, intellectual property, automobiles, data, and services, illustrating a clear pattern of liberalization.

Trade between India and the UK reached $53.3 billion in 2024, with India running a $10.5 billion surplus. The deal aims to lower trade barriers and expand market access, potentially boosting bilateral trade by 39% to $34 billion annually by 2040.

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