India File: UK deal sets cautious tone on trade

India’s newly minted free-trade agreement with the United Kingdom is taking centre stage. It is the first such deal to emerge from recent bilateral talks with several large trading partners, including the U.S., EU and Australia. Analysts believe this UK pact signals a careful and calculated approach in opening up India’s markets, a template that may shape future negotiations especially with the United States amid threats of friction under President Trump’s reciprocal tariff policy. A landmark deal but limited scope early on India and the UK signed their comprehensive economic trade agreement in late July 2025, after more than three years of intensive talks. Average import tariffs on British goods in India will shrink from about 15% to 3% Auto tariffs will plummet from over 100% to around 10% for high-end passenger cars but with quotas and a 15-year phase in period. Importantly, critical sectors like agriculture and dairy remain off the table, a red line for India, given food security and political sensitivities. But the real story lies in how the deal has been designed. India has deliberately structured it to deliver shorter‑term gains for its exporters duty‑free access from day one for most of its goods and deferred liberalisation of