India should draw lessons from the US-UK lopsided trade deal and be cautious on deal with America, warns GTRI

The recently concluded limited trade deals between the United States and the United Kingdom present clues about the kind of trade arrangements Washington may pursue with India, the Global Trade Research Initiative (GTRI) said, cautioning the Indian negotiators.On Thursday, two countries announced a limited bilateral trade agreement that will soften the impact of US tariffs on many products that originated from the UK.

Under the agreement, the US will reduce tariffs on several key British exports. Tariffs on cars have been cut from 27.5 per cent to 10 per cent for up to 100,000 vehicles annually, matching the UK’s current export levels to the US.

Additionally, 25 per cent tariffs imposed on UK steel and aluminum under Section 232 have been fully eliminated. Aerospace trade has also received a boost, with tariffs dropped on UK-made components like Rolls-Royce jet engines.

On the other side, the UK will open its market to more US agricultural exports. It has removed a 20 per cent tariff on U.S. beef within an existing quota and added a new duty-free quota of 13,000 metric tonnes. Tariffs on 1.4 billion liters of US ethanol have also been abolished. Furthermore, tariffs on around 2,500 American products — including olive oil, wine, sports gear, and certain food items — have been reduced from an average of 5.1 per cent to 1.8 per cent.

The GTRI noted in its analysis that the US-UK pact reflects the Trump administration’s preference for narrow, transactional arrangements focused on tariffs and big-ticket purchases, rather than comprehensive Free Trade Agreements (FTAs) that require Congressional scrutiny.GTRI emphasised that this imbalance must serve as a warning to India.”If the UK-US deal sets the template, India can expect growing US pressure to finalise a ‘mini-deal” of its own — focused on tariff cuts and key strategic commitments rather than a full FTA that may come much later. The likely U.S. demands are familiar. India may be asked to reduce tariffs on a basket of sensitive agricultural products, including soybeans, ethanol, apples, almonds, walnuts, raisins, avocados, spirits, many GMO products and meat and poultry,” the think tank said.

The GTRI highlighted that beyond agriculture, India may also face pressure to ease FDI restrictions on multi-brand retail, allow more market access to US digital and e-commerce firms, and relax rules on data localisation, insurance, and remanufactured goods.

The US may also push for large-scale commercial purchases by India, including oil, LNG, defence platforms, and aircraft from American manufacturers such as Boeing.

“India must not walk into a similar trap. Any trade deal with the US must be reciprocal and equitable — not one-sided or politically driven. Agriculture, in particular, should be a red line,” the GTRI added in a note.

“India must insist on a balanced, fair, and sovereign approach to negotiations — one that strengthens its economy without compromising its farmers, its digital future, or its regulatory space,” the GTRI note added.