India's Trade Agreements with UAE, Switzerland, and UK Signal Bold Policy Shift: GTRI Report

July 24, 2025

India’s Emerging FTA Strategy: A Turning Point in Trade Policy

India’s recent trade agreements with the United Arab Emirates (UAE), Switzerland, and most notably with the United Kingdom represent a significant strategic shift in the country’s approach towards Free Trade Agreements (FTAs). According to a detailed analysis by the Global Trade Research Initiative (GTRI), India is now entering sensitive domains that were previously protected under domestic red lines — a move that could reshape the country’s future engagements with global trade partners.

From Protectionism to Market Access: What Has Changed?

The GTRI report notes that the nature of India’s FTAs is evolving rapidly. Historically cautious, especially in areas like government procurement, intellectual property rights (IPR), data sovereignty, automobiles, and services, India is now relaxing these barriers under bilateral agreements.

Each new agreement — starting with UAE, then Switzerland, and now the UK — has deeper commitments and greater sectoral openings, indicating a long-term pattern of gradual liberalization.

Tariff Rate Quota (TRQ) for Luxury Automobiles: A First for India

One of the most groundbreaking elements of the India–UK FTA is the Tariff Rate Quota (TRQ) system introduced for UK-manufactured passenger vehicles. This marks India’s first-ever automobile tariff concession in a trade deal.

India has agreed to reduce customs duties on high-end cars — above 3000cc for petrol and above 2500cc for diesel — from over 100% to just 10% over 15 years.
The TRQ will start at 10,000 units annually and rise to 19,000 units by year five.
Importantly, vehicles outside this quota will still face steep tariffs ranging from 95% to 50%, depending on model type and import year.

This move is likely to benefit UK-based luxury carmakers, especially Jaguar and Land Rover, owned by India’s Tata Motors. However, this could also set a precedent for similar demands from other major automotive partners like Japan, South Korea, the EU, and the US.

Opening Government Procurement: 40,000 Contracts Now Accessible

In a first-of-its-kind move, India has opened access to its government procurement market for UK bidders:

Over 40,000 high-value public contracts from central ministries and departments will now be open to UK companies.
These contracts include sectors like infrastructure, transportation, and renewable energy.

This represents a significant departure from India’s previously protectionist procurement stance and is expected to have a major impact on domestic bidders and international interest in India’s public sector spending.

Intellectual Property Rights: A Sensitive Concession

The GTRI report points out that India has made a key compromise in the Intellectual Property Rights (IPR) chapter of the UK deal:

India has agreed to emphasize "adequate remuneration" for patent holders, consistent with Article 31(h) of the TRIPS Agreement.
This wording potentially limits India’s ability to issue compulsory licenses during public health emergencies — a tool it has historically relied on to promote access to affordable medicines.

While this aligns India with global IPR standards, it also raises concerns over reduced domestic flexibility in responding to future healthcare crises.

Market Access in Services: British Firms Gain Significant Entry

The agreement includes broad liberalization in services, granting national treatment and market access to UK firms across several sectors:

Accounting and auditing
Telecom (with 100% FDI allowed)
Insurance (up to 74% FDI cap)
Environmental services
Auxiliary air transport services

UK companies can now offer many of these services without establishing a local presence, putting them on equal footing with Indian companies.

Moreover, India has agreed to mutual recognition of UK professional qualifications in law and accounting, though the legal services market in India remains largely closed to foreign law firms.

A Shift with Precedent-Setting Potential

The India-UK FTA, as per GTRI, is more than a bilateral trade agreement — it signals a directional shift in India’s global trade philosophy. By softening its stance on strategic sectors, India is preparing to engage in deeper, more comprehensive trade frameworks, including those currently under negotiation with the European Union and the United States.

However, this shift is not without risks:

Domestic industries may face increased competition.
Legal commitments on IPR and TRQ systems could limit policy autonomy.
There may be growing pressure from other trading partners to seek similar concessions, especially in autos and services.

Conclusion: India’s FTAs Reflect a New Strategic Confidence

India’s recent FTAs, especially with the UK, reveal a country more confident in its economic footing and more open to global integration. This transition from a protectionist to a rule-based trade regime positions India to play a greater role in global commerce, but also demands careful domestic adjustment policies to protect vulnerable sectors.

As these FTAs move towards implementation, India must balance openness with sovereignty, ensuring trade benefits don’t come at the cost of strategic autonomy.

📌 Stay tuned for our next analysis on India–EU FTA negotiations and how these agreements are redefining India’s global economic positioning.
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