India's new trade deal with the UK is a strategic power play, rewriting global rules. It balances intellectual property, challenges US pressure, and diversifies India's exports amid proposed tariff hikes.
India's new free trade agreement with the UK isn't just a deal; it's a strategic power play on the global stage. With its comprehensive intellectual property, or IP, provisions, the pact is a weapon in India's diplomatic arsenal, granting it unprecedented leverage in future showdowns with major global economies such as the US and EU. The agreement is seen as a direct response to years of US accusations over India's controversial policies on compulsory licensing and the "evergreening" of patents. The US Trade Representative, or USTR, Special 301 Report released in late April (see here) — outlining the government's perspective on international intellectual property enforcement in trade — labeled India as "one of the world’s most challenging major economies with respect to protection and enforcement of IP” (see here).
India and the UK cemented a stronger economic partnership by signing the Comprehensive Economic and Trade Agreement, or CETA, in London in late July, which is expected to double bilateral trade to $112 billion by 2030 (see here).
The timing of the landmark India-UK trade agreement is of particular significance. Tarun Khurana, a partner at Khurana & Khurana, views the agreement as a multidimensional response to increasing tariffs from the US, which has proposed hikes as high as 50 percent (see here) on certain Indian goods. The CETA encourages India to diversify its export markets and reduce its reliance on any single country.
Khurana believes CETA "would give an opportunity for India to come closer to other countries such as China, Japan, South Korea and the EU and focus more energies in developing these relationships." Consequently this would increase the importance of IP protection in these respective countries, he said, predicting the focus on IP "to continue momentum and hopefully grow by 15 percent to 20 percent" annually.
— Rewriting rules of engagement —
By forging a balanced IP framework, India has rewritten the rules of engagement for all future negotiations.
Vaishali Mittal, a senior partner at Anand and Anand, said that the agreement "has the potential to significantly strengthen India’s innovation ecosystem and global trade competitiveness." Indian startups and companies are set to benefit from a more predictable and transparent IP environment, which can foster innovation and secure investor confidence, she added.
The IP chapter of the CETA introduces modernized enforcement measures, including criminal penalties for large-scale counterfeiting and digital remedies such as website blocking for clear infringement, Aman Sinha, an IP lawyer, said.
This is expected to "deter counterfeiting and piracy, protecting Indian brands and technologies," Mittal said.
In addition, stronger IP frameworks are expected to encourage collaboration with UK research institutions, leading to technology transfer and co-innovation, Mittal said. While some stakeholders have expressed concern about increased compliance costs, robust IP systems are seen as a driver for higher-value innovation and new opportunities for Indian industries across pharmaceuticals, information technology, electronics, and manufacturing, she added.
— Safeguarding public health —
A significant aspect of the CETA is its explicit affirmation of the Doha Declaration on the TRIPS Agreement and Public Health, Sinha told MLex. This is the first time an economic treaty has explicitly preserved public-health flexibilities, ensuring that trade pacts do not prevent countries from taking measures to protect public health and ensure access to essential medicines.
Sinha noted that the agreement goes further by incorporating a regulatory-review exception, allowing generics to complete trials and filings during a patent term.
The agreement has drawn mixed reactions from the Indian pharmaceutical sector. While praised for preserving the Patent Act of 1970 and creating new export avenues, some experts worry it could weaken India's compulsory licensing safeguards and potentially give an advantage to large multinational pharmaceutical companies.
Mittal clarified that the CETA does not compromise India’s ability to issue compulsory licenses under Section 92 of the Indian Patents Act, which empowers the government to act swiftly in national emergencies.
Mittal also raised concerns about some generic companies misusing the threat of compulsory licensing as a pressure tactic to force innovators into unfavorable licensing terms, which could undermine the confidence in India’s IP regime.
"Some generic companies have misused the compulsory licensing provisions...often filing applications without genuine attempts to obtain voluntary licenses and use the mere threat of a compulsory license as a pressure tactic to force innovators into granting licenses on unfavorable terms," Mittal said.
Mittal said that compulsory license applications "are often targeted at newly launched, life‑saving drugs, undermining innovators’ ability to recoup their R&D investments and discouraging the timely introduction of cutting‑edge therapies in India."
Sinha, however, countered this claim, saying that it is "not borne out by facts," highlighting that India has only granted one compulsory license over the past two decades. India granted Natco Pharma a compulsory license in March 2012 for the cancer drug sorafenib, or Nexavar (see here).
"Nothing remotely suggests a flood of abusive compulsory licenses," Sinha said, noting that the tool is "tightly cabined and is invoked sparingly, perhaps too sparingly."
Citing the example of the drug Risdiplam, Sinha said that this oral medication used to treat spinal muscular atrophy, "is one such instance where compulsory license should be invoked."
India should make a statement that no country can interfere in its internal affairs, Sinha said.
— Pushback on evergreening —
Indian courts are actively pushing back against "evergreening"— the practice of obtaining patents on trivial modifications of known medicines — and overreach by original drug developers. Sinha cited the Dapagliflozin and Linagliptin patent cases as examples. In the Dapagliflozin case, both the Delhi High Court and the Supreme Court largely rejected AstraZeneca's plea for an injunction. "The UK Court of Appeal later revoked the contested patent for lack of plausibility, underscoring that bare assertions don’t earn a monopoly," Sinha added.
Similarly, in the Linagliptin case, the Delhi High Court denied injunctions on "species drugs" and clarified that there is no time limit for such a challenge. Macleods Pharmaceuticals had alleged that Boehringer Ingelheim was artificially extending the patent protection beyond 20 years by filing multiple patents for Linagliptin, a compound used to treat type-2 diabetes. The Delhi High Court ruled in January 2025 that the petition was valid, clarifying there's no time limit for such a challenge.
Sinha said that India's courts have "repeatedly policed evergreening while keeping access and affordability front-and-centre."
CETA does not dilute Section 3(d) of the Indian Patents Act, a crucial safeguard against evergreening. While this provision is important, Mittal suggested adopting a balanced approach to ensure it serves its intended purpose without discouraging legitimate innovation.
Evergreening is often misused by certain generic manufacturers to block even genuine incremental innovations, Mittal said.
— Beyond pharma —
CETA is poised to impact several key industries beyond the pharmaceutical sector. The agreement contains specific commitments to bolster cross-border copyright, including streamlining the collection of royalties for artists and facilitating cross-border content licensing, Ashneet Hanspal of Ahlawat & Associates said.
In the digital realm, the pact introduces robust legal measures to combat online IP infringement, including trademark and copyright violations on e-commerce platforms, Hanspal noted. Measures such as digital-rights management safeguards and frameworks for content takedowns are expected to incentivize UK creators to collaborate with Indian firms, driving investment in India's tech and creative sectors, she added.
While these changes create a favorable opportunity for Indian businesses to expand in the UK, Hanspal cautioned that they could also increase enforcement costs and compliance burdens, potentially disadvantaging Indian small- and medium-sized enterprises, or SMEs.
Another potential concern is India's commitment to review and potentially increase its statutory copyright terms to align with the UK's, which she added, could negatively impact SMEs that rely on works in the public domain.
Nonetheless, Mittal said that CETA will give India greater negotiating strength in future trade talks with the EU, the US and others, "potentially opening new markets for Indian technology and creative industries."
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