India-UK Trade Deal Faces Hurdles Over Procurement

Negotiations for the India-UK Free Trade Agreement, signed in 2024, are encountering challenges over government procurement and duty cuts on Scotch whisky. Today’s discussions revealed India’s concerns about granting UK firms access to its public procurement market, valued at $300 billion annually. New Delhi is seeking reciprocal access for Indian businesses in the UK, particularly in IT and consulting services. The Commerce Ministry, led by Piyush Goyal, remains optimistic about resolving these issues, emphasizing India’s economic resilience and growing global demand for its services.

The trade deal aims to boost bilateral trade to $50 billion by 2030, with a focus on reducing tariffs on Indian textiles and agricultural products. However, UK demands for lower duties on whisky have sparked debates about protecting India’s domestic liquor industry. The government is exploring targeted interventions, such as the National Traders’ Welfare Board, to support local businesses affected by the agreement. India’s robust macroeconomic fundamentals, including low inflation and 6.5% growth, provide leverage in these negotiations, ensuring favorable terms.

The India-UK trade talks reflect broader efforts to diversify India’s trade partnerships amid U.S. tariff pressures. By addressing procurement concerns and balancing concessions, India aims to strengthen its economic ties with the UK while protecting domestic interests. The outcome of these negotiations could set a precedent for India’s trade strategy with other developed nations, emphasizing mutual benefits and market access. As India navigates these challenges, its growing global influence will shape the future of bilateral trade.