India speeds up UK, EU trade deals to buffer against Trump’s tariffs

India is accelerating efforts to finalise free-trade agreements with Britain and the European Union by the end of the year, as it seeks to safeguard its economy against the ripple effects of US President Donald Trump’s latest tariff moves. Analysts say New Delhi’s move to diversify its trade partnerships reflects a strategic shift to reduce reliance on the US market. Trump announced steep tariffs on global trading partners last week, triggering turmoil in financial markets. By Wednesday, however, he had reversed course, announcing a 90-day suspension of the duties for most countries – with China notably excluded. The suspension includes the 26 per cent tariff that Washington had announced on Indian goods, although a baseline global rate of 10 per cent remains in effect. India was expected to adopt a measured approach in its negotiations with the United States, aiming to secure a trade agreement by September, said T.S. Vishwanath, principal adviser at international trade consultancy ASL-Legal. At the same time, Delhi is working to expand its trade partnerships to cushion against any potential fallout from American policy shifts. Vishwanath said he was optimistic that India would conclude free-trade agreements with both the UK and the European Union by the end of the year, noting the renewed urgency for talks on all sides. Delhi was also likely to advance trade discussions with New Zealand in the coming months, he said. India and Britain recently restarted free-trade talks, nearly a year after negotiations were paused ahead of general elections in both countries. British businesses were informed during a call with negotiators this week that 90 per cent of the UK-India free-trade agreement had already been finalised, The Guardian reported. Remaining issues include tariffs on whisky, cars and pharmaceuticals. India has been pushing for more visas to give its workers greater mobility, analysts say, noting that a trade deal would also benefit the UK by enhancing access to one of the world’s fastest-growing major economies and largest consumer markets. The call with businesses precede talks between British finance minister Rachel Reeves and her Indian counterpart Nirmala Sitharaman about a bilateral investment treaty. This treaty, being negotiated in parallel with the free-trade agreement, aims to establish legal protections for cross-border investments. Both Reeves and Sitharaman have separately stressed the need to broaden their respective countries’ trade relations. Meanwhile, analysts say that negotiations between India and the European Union for a free-trade agreement, which had been stalled for years, have also shown significant progress recently. In February, Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen met in Delhi, where they expressed a shared determination to finalise the trade agreement. Von der Leyen was accompanied by a delegation of EU leaders, and discussions extended beyond trade to include defence and security partnerships. Trump’s tariffs have created urgency around diversification, encouraging quicker deal-making Chris Blackburn, UK-based political commentator “Partially, Trump’s tariffs have created urgency around diversification, encouraging quicker deal-making between global powers,” said Chris Blackburn, an independent UK-based political commentator. However, he cautioned that negotiators were likely to tread carefully to ensure a “win-win” outcome for both the India-UK and India-EU agreements. “While progress has been made, political and regulatory hurdles may delay finalisation beyond this year. If the agreements are concluded quickly, they may be seen as rushed – potentially creating clear winners and losers in key sectors,” Blackburn said. One major sticking point in the India-EU talks is the EU’s planned implementation of a carbon border adjustment mechanism starting next year. This policy would impose charges on carbon-intensive goods, posing challenges for India, which still relies heavily on coal and fossil fuels to meet its energy needs despite making great strides in renewable energy capacity. Climate experts are hopeful for a compromise, however, noting both sides’ commitments to net-zero goals. They suggest that collaboration could extend into renewable energy and the development of environmentally friendly technologies. Limiting US tariff fallout Blackburn also highlighted that both the UK and the EU had seen reduced exports of steel, aluminium and vehicles to the US. If Washington’s trade policies persist, other key sectors – including aerospace, industrial machinery, pharmaceuticals, luxury goods, and agricultural products such as cheese, wine and olive oil – could face greater exposure to trade uncertainties. “This pressure is pushing them to diversify,” Blackburn said. “Countries have hedged between East and West for decades. The East could win. It’s a high-stakes gamble by Trump.”

India speeds up UK, EU trade deals to buffer against Trump’s tariffs

Analysts warn of potential ‘winners and losers’ if deals are rushed – though 90 per cent of the UK deal is already reportedly done