The Fine Print India Keeps Glossing Over in Its New Trade Deals

India’s trade posture has shifted. For much of the post-liberalisation period, free trade agreements were approached cautiously. That instinct is now giving way to a more active push. Agreements with the UK, EU, Mauritius, UAE, and Oman have followed one another in quick succession, with a US deal also under discussion. According to the WTO, 69 regional trade agreements were implemented globally between 2020 and 2025, and India is now firmly part of that momentum.

The pivot is being read, mostly, as maturity. India has stopped sulking at the gates and is now engaging. The India-UK CETA and the India-EU FTA are held up as proof that the country can play the long game: market access, export diversification, value chain integration, all the things it was supposedly leaving on the table before. For textiles, gems and jewellery, leather, pharmaceuticals: real opportunities, genuinely.

But there is a version of this story that is getting considerably less attention. Buried inside the legal chapters of these agreements are commitments that do not appear in joint statements or ministerial press conferences, and some of them are worth a careful read.

Hidden Costs
The government procurement chapter of the India-UK CETA allows UK firms to qualify as Class II local suppliers at just 20% domestic content, putting them in the same queue as Indian companies for public tenders. The logic of reciprocity is clean enough on paper. The reality is that Indian MSMEs are being asked to compete for government contracts against British firms with deeper pockets, better technology, and decades of institutional scale behind them. That contest has a fairly predictable outcome. It also sits awkwardly alongside Atmanirbhar Bharat and Make in India, both of which rest on the assumption that procurement policy can be used to build domestic capacity. It can, just less so now.

The intellectual property chapter is where things get genuinely uncomfortable. It frames voluntary licensing as the preferred mechanism for ensuring access to medicines, nudging aside the compulsory licensing provisions that India has historically used as a backstop during health emergencies.

Compulsory licensing is not an exotic instrument — it is how a country ensures that patent holders cannot simply sit on a drug that people need. Replacing it with a framework that depends on pharmaceutical companies volunteering their cooperation is, to put it plainly, optimistic. The removal of the patent working disclosure requirement makes this worse. Generic manufacturers use working disclosure to find out where patents are being used, where they are not, and where affordable alternatives could enter the market. Without it, that visibility goes, and so does some of the competitive pressure that keeps drug prices from running away entirely.

The India-EU agreement introduces a different kind of vulnerability. Its trade and sustainable development chapter formally brings labour and environmental standards into the agreement, which sounds progressive until you think about how those standards get applied. The text says they cannot be used for protectionist purposes, though this is exactly the kind of clause that sounds reassuring in the abstract and becomes contested the moment a specific export is challenged. Indian manufacturing sectors operate under wage structures and labour conditions that look nothing like European norms, and the EU's expanding green trade architecture — CBAM, the Corporate Sustainability Due Diligence Directive, deforestation regulations — will add compliance costs on top of whatever tariff benefits the agreement provides. 

Whether those costs cancel out the gains is not a question being asked loudly enough.

Digital trade is the slow-burn risk. Current agreements with the UAE, UK, and EU keep digital commitments in best-endeavour language, which gives India room. The problem is that best-endeavour language in one agreement becomes the baseline from which the next negotiation starts. When India eventually sits across from American trade negotiators, that baseline is where they will begin, and they will push for something harder. The US has done this before, in other contexts, with other partners. India's flexibility on digital trade policy — its ability to regulate domestic platforms, support homegrown digital firms, and shape its own data governance framework — could erode not through any single dramatic concession but through a series of incremental ones that seem manageable at the time.

To be clear, none of this adds up to a case for India retreating from trade engagement. The global order is fragmenting, bilateralism is back, and countries that disengage rarely return to the table on better terms. But engagement requires reading what you are signing. The current conversation around India's new FTAs is heavy on export projections and light on chapter-by-chapter scrutiny. Procurement preferences, compulsory licensing, labour disciplines, digital commitments: these will have consequences that arrive years from now, quietly, in the form of constrained options and lost leverage. The fanfare, by then, will be long over.

*Views are personal.