India’s Trade Crossroads: US and UK Negotiations Put Export Safeguards in Focus

• India hosts US and UK trade leaders amid critical negotiations.

• Steel safeguard dispute clouds India–UK trade pact.

• India seeks US tariff exemptions amid ongoing investigations.

• Iran conflict disrupts shipping, pressuring exports.

• Trade deals seen as vital to diversify markets and stabilise the rupee.

India finds itself at a pivotal moment in its global trade strategy as it navigates two high-stakes negotiations with the United States and the United Kingdom. Both discussions are expected to test New Delhi’s ability to secure stronger protections for its exporters while balancing broader geopolitical and economic pressures.

This week, India is hosting a US trade delegation led by chief negotiator Brendan Lynch, alongside a separate visit by UK Business and Trade Secretary Peter Kyle. The meetings come at a time when India is recalibrating its trade relationships to safeguard export interests and attract foreign investment.

UK Steel Dispute Casts Shadow Over FTA

Tensions have surfaced in India’s trade engagement with the United Kingdom. New Delhi has signaled that it may reconsider certain tariff concessions granted under last year’s free trade agreement if British safeguard duties on steel exports are not addressed.

The UK’s planned safeguard measures, set to take effect next month, could limit access for Indian steel producers. In response, a senior Indian official indicated that tariff reductions on selected British goods — including Scotch whisky — could be rolled back if Indian exports face restrictions.

Commerce Minister Piyush Goyal is expected to discuss these concerns directly with Peter Kyle during his visit to New Delhi, with both sides seeking to accelerate implementation of the broader trade pact while resolving the steel issue.

US Talks Amid Tariff Uncertainty

Parallel negotiations with Washington are unfolding under a cloud of uncertainty. India is pressing for assurances that its exports will be shielded from additional US tariffs that may arise from ongoing trade investigations.

The urgency around a bilateral agreement has diminished somewhat following a recent US Supreme Court ruling that struck down the reciprocal tariff framework introduced under President Donald Trump. According to Ajay Srivastava, founder of the Global Trade Research Initiative, the decision reduces immediate pressure on India to conclude a comprehensive deal.

Srivastava argues that a bilateral pact would not necessarily protect India from future US trade actions and cautions against committing to long-term obligations until US trade policy stabilises.

Last year, the White House imposed steep tariffs on Indian goods, partly linked to India’s purchases of Russian oil. Earlier this year, both countries reached an interim trade understanding. However, the Office of the US Trade Representative subsequently initiated investigations under Section 301 of the Trade Act into several nations, including India, citing concerns related to forced labour and industrial overcapacity.

Should those probes result in adverse findings, Indian exports could face additional duties. New Delhi has urged Washington to handle these concerns within the framework of ongoing negotiations rather than imposing unilateral measures.

US trade officials are scheduled to hold discussions with Indian counterparts starting Tuesday.

External Pressures Add Complexity

These negotiations come at a challenging time for India’s external trade environment. The ongoing conflict involving Iran has disrupted shipping routes through the Strait of Hormuz, a critical artery for global energy supplies and regional trade.

The disruption has affected both oil flows and access to an important export destination for Indian goods. Although the government has introduced measures to soften the impact on exporters, policymakers are wary that prolonged instability could weigh on trade performance during the current fiscal year.

Against this backdrop, stronger trade agreements with the US and UK could help offset external headwinds, support export growth, and encourage capital inflows — particularly important as the rupee faces pressure in currency markets.

Strategic Diversification

Prime Minister Narendra Modi’s broader trade strategy centres on diversifying India’s export destinations amid rising geopolitical fragmentation. Securing improved market access in advanced economies such as the US and UK is seen as critical to reducing dependence on any single region.

However, the path forward is far from straightforward. India must balance defensive measures to protect domestic industries with the need to remain an attractive and reliable trade partner.

As talks unfold in New Delhi this week, the outcomes could shape not only near-term export performance but also India’s long-term positioning in a rapidly evolving global trade landscape.