India-UK FTA sets ball rolling for trade deal with Trump before tariff pause ends

India and the United Kingdom clinched a landmark multi-billion-pound free trade agreement (FTA) on May 6, aiming to boost bilateral trade by £25.5 billion annually by 2040. While the deal is being hailed as a win for both nations, its strategic timing couldn't be more crucial for India.

With Donald Trump’s tariffs on a 90-day pause, India is shoring up its global trade partnerships to gain leverage ahead of any renewed negotiations with Washington.

In fact, both countries are also seeking bilateral deals with the United States to remove some of Trump's tariffs that have upended the global trade system, and the resulting turmoil sharpened focus in both London and New Delhi on the need to clinch a UK-India trade deal.

Union Commerce and Industry Minister Piyush Goyal on Tuesday said that the bilateral trade agreement with the United States is moving in the right direction.

"Conversation with the US is going very well. We were the first country to start the conversation. Conversion is going extremely well. We are moving progressively in the right direction," said Union Minister Piyush Goyal, speaking at the Columbia India Energy Dialogue in New Delhi.

India and the US aim to ink the deal by the fall of 2025 and double total bilateral trade to USD 500 billion by 2030.

The India-UK FTA offers New Delhi an economic and diplomatic buffer. The deal not only reduces tariffs on 90% of goods but also liberalizes trade in services and eases market access across sectors like automobiles, spirits, aerospace, medical devices, and information technology. For India, this means a diversification of export destinations and a reduced reliance on the US market, where trade unpredictability looms large under Trump’s "America First" rhetoric.

The timing of this FTA plays directly into India’s strategy to gain leverage in future trade negotiations with the United States. Washington has long pushed New Delhi to lower tariffs on American goods—especially in areas like dairy, tech, and medical equipment. With the UK pact showcasing India’s willingness to engage in meaningful trade liberalization under mutually beneficial terms, New Delhi can credibly push back against unilateral US demands.

This also signals to Washington that India is actively opening up its economy—but only when its strategic and developmental interests are respected. The success of this deal could serve as a template or reference point in US-India trade talks, particularly around sensitive sectors like automobiles and spirits, where tariff cuts were granted to the UK under specific quotas and timelines.

The India-UK free trade agreement is far more than an economic pact—it’s a geopolitical statement. In a world where trade is increasingly being used as a tool of power and influence, India is asserting its role not just as a rule-follower, but as a rule-shaper. With Trump’s tariff sword hanging in the air, this FTA strengthens India’s hand both in managing potential economic fallout and in negotiating future deals—especially with a wary but interested United States.