London Daily

Focus on the big picture.
Wednesday, Nov 12, 2025

India plays hardball on UK trade deal as Liz Truss scrambles for a win

India plays hardball on UK trade deal as Liz Truss scrambles for a win

Services firms are worried about the rush to a UK-India deal — but a big win for Scotch whisky is in the works.

India is driving a hard bargain as Britain’s crisis-hit government tries to get a coveted trade deal over the line within weeks.

Prime Minister Liz Truss, whose fledgling administration could do with a break amid market turmoil and plunging poll ratings, has ordered her trade chief to hold fast to an October 24 Diwali deadline for the deal set by predecessor Boris Johnson and India’s Narendra Modi. But, with weeks to go in talks to secure a post-Brexit win, some crucial sectors are spooked by what’s on the table.

If the deal “doesn’t shift quite a lot,” said a senior business person briefed on the content of the talks, “it will be into the ‘a bad deal is worse than no deal’ territory.”

That’s not to say Britain’s negotiators — in daily talks with their counterparts — aren’t racking up wins. The U.K. is on the cusp of securing a cut to India’s steep, 150 percent federal tariff on Scotch whisky imports, two people familiar with the matter told POLITICO.

It would mark an early victory for an iconic industry under Trade Secretary Kemi Badenoch, who addresses the Conservative Party conference in Birmingham Monday. Her boss Truss — herself a former U.K. trade chief — has described landing a deal with India as one of her top trade priorities.

Yet, as ever with global trade talks, there’s a snag. While India is prepared to slash the federal whisky tariff as the two sides race to the end, Delhi’s negotiators are using it as leverage to get what they want from Britain.

A spokesperson for Britain’s trade department said it “cannot comment on live negotiations” but that “we are clear that we won’t sacrifice quality for speed.” The U.K. will, it stressed, “only sign when we have a deal that meets the U.K.’s interests.”

Privately, a government official acknowledged India has been “playing dirty” through a public pressure campaign to push Britain into a deal that insiders expect will focus on eliminating goods tariffs.

Even if it secures the tariff cut on Scotch, the whisky industry remains concerned that a host of bureaucratic barriers will still need to be removed to make the reduction worthwhile.

“Even if Scotch tariffs come down, there are all manner of market access barriers, particularly at state level, that will continue to be a major challenge,” said David Henig, director of U.K. trade policy at the European Centre for International Political Economy (ECIPE) think tank.

In a fresh twist last week, India threatened to slap $247 million of retaliatory tariffs on Scotch and other industries if Britain doesn’t drop controversial safeguards it put in place to protect its domestic steel industry.

While the two issues are ostensibly separate, some trade experts saw it as a well-worn hardball negotiating tactic from Delhi, with a person close to the deal saying it looked designed to give India “additional leverage” in the talks on a free trade agreement.

Truss has described landing a deal with India as one of her top trade priorities


“India did this to the U.S. a few years ago, again over steel,” they noted, saying the move is “not dissimilar” to India’s last-minute pressure tactics at the COP26 climate summit and the recent WTO negotiations over COVID-19 vaccine access.

The move shows India is “lining up more leverage to get the narrowly focused trade deal they want from us,” Henig said. Such pressure tactics are “certainly in the playbook of trade negotiations,” said another trade expert.

A person close to the Scotch whisky industry disputed the idea that the steel retaliation move was linked to the wider trade talks, saying Delhi is merely “reacting” to Britain’s move in June to shore up its steel industry.


‘Playing dirty’


As wrangling over the whisky tariffs continues, Britain’s services sector has its own doubts — and time is running out.

Several business associations — including Britain’s tech, financial services, pharmaceutical and chemical industries — went public with their concerns about the speed of talks and what the deal will offer British firms back in August.

“I have been saying for some time that I would rather we get a more comprehensive deal than rush to complete it by Diwali,” said Karan Bilimoria, Cobra beer magnate and founding chairman of the UK India Business Council.

Negotiations would “ideally” wrap up by the end of the year, Bilimoria said, leaving the door open to strike a pact that benefits Britain’s key growth sectors. But he added: “From what I am aware of, the government is working towards a deal that will be broad, comprehensive and benefits the U.K. and our businesses.”

Britain remains overwhelmingly a services-based economy: the sector generated 78 percent of total U.K. economic output from April to June this year.

Securing both the free flow of data between the countries and strong protections for intellectual property rights were key “overall objectives” for the deal set out in the U.K.’s strategic approach for talks in January.

Yet data also looks like a major roadblock to landing a deal with India that secures big wins for the U.K.’s services giants.

Britain’s deal with India “may fail to achieve meaningful access for U.K. tech, digital and financial services companies,” Kathryn Watson, an expert in trade policy at the consultancy Flint Global warned. India, she stressed “is very protectionist when it comes to data being transferred out of its region and is increasingly making it harder for companies to store data outside of its borders and operate in the country without setting up there first.”

The deal is “predominantly a fairly narrow set of tariff reductions rather than anything significant that will change the cost of doing business in India for U.K. companies,” Henig said.

Indian Prime Minister Narendra Modi


Businesspeople and experts said that the sheer volume of areas missing from the pact will now require British negotiators to bake joint committees into the deal so that outstanding issues can be hammered out in the future.

“In light of the fact not everyone’s going to get everything they want, U.K. negotiators are alert to the need to put structures in place that you can come back to [the deal] through the implementation of the agreement,” said another senior business person.

British businesses “should be skeptical that structures put in place for the future will deliver significantly and quickly,” Henig said, referring to any working groups and joint committees formed by the pact. “But they may be able to make gradual gains, particularly if the focus on the U.K. side is on implementation of deals rather than negotiation of new ones.”

Truss has given British negotiators as wide a mandate as possible to secure the deal by the Diwali deadline.

“It looks to be a goods-based deal that gives Indian companies the right to sell into the U.K. without having to have a presence in the U.K.,” said the first senior business person quoted. “Whereas what the U.K. wanted was a services and goods deal with much better establishment provisions, with at least something on digital trade and intellectual property rights.”

As it stands, there’s so little for the services sector in the deal “as to make it feel very asymmetric” in India’s favor, they added. “It’s a shame because this is a once-in-20-year opportunity and we won’t get to renegotiate it anytime soon.”

Newsletter

Related Articles

0:00
0:00
Close
UK Upholds Firm Rules on Stablecoins to Shield Financial System
Brussels Divided as UK-EU Reset Stalls Over Budget Access
Prince Harry’s Remembrance Day Essay Expresses Strong Regret at Leaving Britain
UK Unemployment Hits 5% as Wage Growth Slows, Paving Way for Bank of England Rate Cut
Starmer Warns of Resurgent Racism in UK Politics as He Vows Child-Poverty Reforms
UK Grocery Inflation Slows to 4.7% as Supermarkets Launch Pre-Christmas Promotions
UK Government Backs the BBC amid Editing Scandal and Trump Threat of Legal Action
UK Assessment Mis-Estimated Fallout From Palestine Action Ban, Records Reveal
UK Halts Intelligence Sharing with US Amid Lethal Boat-Strike Concerns
King Charles III Leads Britain in Remembrance Sunday Tribute to War Dead
UK Retail Sales Growth Slows as Households Hold Back Ahead of Black Friday and Budget
Shell Pulls Out of Two UK Floating Wind Projects Amid Renewables Retreat
Viagogo Hit With £15 Million Tax Bill After HMRC Transfer-Pricing Inquiry
Jaguar Land Rover Cyberattack Pinches UK GDP, Bank of England Says
UK and Germany Sound Alarm on Russian-Satellite Threat to Critical Infrastructure
Former Prince Andrew Faces U.S. Congressional Request for Testimony Amid Brexit of Royal Title
BBC Director-General Tim Davie and News CEO Deborah Turness Resign Amid Editing Controversy
Tom Cruise Arrives by Helicopter at UK Scientology Fundraiser Amid Local Protests
Prince Andrew and Sarah Ferguson Face Fresh UK Probes Amid Royal Fallout
Mothers Link Teen Suicides to AI Chatbots in Growing Legal Battle
UK Government to Mirror Denmark’s Tough Immigration Framework in Major Policy Shift
UK Government Turns to Denmark-Style Immigration Reforms to Overhaul Border Rules
UK Chancellor Warned Against Cutting Insulation Funding as Budget Looms
UK Tenant Complaints Hit Record Levels as Rental Sector Faces Mounting Pressure
Apple to Pay Google About One Billion Dollars Annually for Gemini AI to Power Next-Generation Siri
UK Signals Major Shift as Nuclear Arms Race Looms
BBC’s « Celebrity Traitors UK » Finale Breaks Records with 11.1 Million Viewers
UK Spy Case Collapse Highlights Implications for UK-Taiwan Strategic Alignment
On the Road to the Oscars? Meghan Markle to Star in a New Film
A Vote Worth a Trillion Dollars: Elon Musk’s Defining Day
AI Researchers Claim Human-Level General Intelligence Is Already Here
President Donald Trump Challenges Nigeria with Military Options Over Alleged Christian Killings
Nancy Pelosi Finally Announces She Will Not Seek Re-Election, Signalling End of Long Congressional Career
UK Pre-Budget Blues and Rate-Cut Concerns Pile Pressure on Pound
ITV Warns of Nine-Per-Cent Drop in Q4 Advertising Revenue Amid Budget Uncertainty
National Grid Posts Slightly Stronger-Than-Expected Half-Year Profit as Regulatory Investments Drive Growth
UK Business Lobby Urges Reeves to Break Tax Pledges and Build Fiscal Headroom
UK to Launch Consultation on Stablecoin Regulation on November 10
UK Savers Rush to Withdraw Pension Cash Ahead of Budget Amid Tax-Change Fears
Massive Spoilers Emerge from MAFS UK 2025: Couple Swaps, Dating App Leaks and Reunion Bombshells
Kurdish-led Crime Network Operates UK Mini-Marts to Exploit Migrants and Sell Illicit Goods
UK Income Tax Hike Could Trigger £1 Billion Cut to Scotland’s Budget, Warns Finance Secretary
Tommy Robinson Acquitted of Terror-related Charge After Phone PIN Dispute
Boris Johnson Condemns Western Support for Hamas at Jewish Community Conference
HII Welcomes UK’s Westley Group to Strengthen AUKUS Submarine Supply Chain
Tragedy in Serbia: Coach Mladen Žižović Collapses During Match and Dies at 44
Diplo Says He Dated Katy Perry — and Justin Trudeau
Dick Cheney, Former U.S. Vice President, Dies at 84
Trump Calls Title Removal of Andrew ‘Tragic Situation’ Amid Royal Fallout
UK Bonds Rally as Chancellor Reeves Briefs Markets Ahead of November Budget
×