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Philip Davies (in the Chair)
Before we begin, I remind Members of the House of Commons Commission’s guidance to observe social distancing and wear masks when not speaking.
Bob Blackman (Harrow East) (Con)
I beg to move,
That this House has considered India and UK trade negotiations.
It is a pleasure to serve under your chairmanship, Mr Davies, I think for the first time. I thank the Backbench Business Committee, on which I sit, and Madam Deputy Speaker for allowing us to have this very important debate. I declare my interest as co-chairman of the Indo-British all-party parliamentary group—the other co-chairman, the hon. Member for Ealing, Southall (Mr Sharma), is also present. This is an important time: trade talks between the UK and India have already begun. There is a tremendous opportunity, which I will go into in some detail.
Of course, we have the opportunity to negotiate a trade deal with India—our friends—because we have left the European Union; we now trade and negotiate as a free trading nation. We must embrace the opportunities that that gives us. Colleagues from across the House will, no doubt, also go into the detail of those opportunities, including in services, particularly for the City of London, legal services—India, after all, has the same basic legal system as we have—manufacturing, and Scotch whiskies and Irish whiskeys, which face huge tariff barriers in India at the moment. Those must form part of our successful negotiations.
We have this opportunity because we have a long-term friendship with India. The European Union has been trying to do a deal with India since 1997, but without success. The United States of America has been trying to do a deal with India, but without success. We should therefore not underestimate the difficulties that we may face. Over the weekend we had the good news that our potential membership of the comprehensive and progressive agreement for trans-Pacific partnership, which is worth trillions of pounds, is moving forward. The trade opportunities with India are enormous, and clearly a free trade agreement will support the Government’s strategy of developing the status of the United Kingdom—global Britain—as an independent trading nation.
We are seeking trade and investment opportunities. We champion free trade—I am sure that my hon. Friend the Minister will allude to that particular issue in his speech. We have already negotiated a long-term arrangement with India—co-operation has been taking place over the last year—but now, free trade is the key to our success.
India is a dynamic, fast-growing economy at the heart of the Indo-Pacific region. Our bilateral trading relationship is already quite significant, and we should not underestimate that—£23.3 billion in 2019. A free trade agreement could strengthen that, and could potentially increase exports by £16.7 billion by 2035. That is a goal that we must secure. We can also enhance the already existing trading relationships, which are considerable, and give the UK access to a market with long and short-term benefits. A free trade agreement has to work not only for the United Kingdom but, obviously, for India.
Theresa Villiers (Chipping Barnet) (Con)
Does my hon. Friend agree that one of the significant benefits of a free trade agreement between India and the United Kingdom is access to a market that is increasingly prosperous? Over recent years, millions of people in India have been lifted out of poverty because of economic growth and prosperity. That is fantastic news for India, and it also creates a great opportunity for businesses based in the UK to increase their trading with India.
Bob Blackman
I thank my right hon. Friend for her intervention. India has a young population, full of entrepreneurs and people who want to succeed, and with a growing and establishing middle class and, indeed, upper class. The potential for a wide range of exports gives us many opportunities to draw on for the overall benefit of this country.
UK consumers, producers and businesses will all gain from a free trade agreement. We must maintain our high environmental standards on labour, food safety and animal welfare in any free trade agreement, not just with India but across all our different agreements. It is also important to protect the NHS when we negotiate, as we do not want it to be compromised in any shape or form. We want to secure the best possible agreement, and the potential interim agreement could deliver early benefits. I look forward to the Minister alluding to that agreement, as well as to the strategic opportunities I have mentioned.
We share a common set of values. India is the world’s largest democracy and has long maintained its support for international co-operation and democratic Government. As my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) said, there have been huge advances over the past few years in the economy of India, the rights of Indians to work, and for villages across India to gain benefits from its trading position.
We work together in various multilateral fora, including the United Nations, the World Trade Organisation and the Commonwealth. In May 2021 we committed to an enhanced trade partnership, which could double trade by 2030, strengthening our relationship and invigorating our respective economies. That is part of a 2030 road map that covers the full spectrum of our relationship with India.
We have strong cultural links. Some 1.5 million British nationals are of Indian origin. I see one or two here in the Chamber, which demonstrates the role that the British Indian population plays. We support over half a million jobs in each other’s economies, so an agreement would further develop that deep-seated relationship. It would also help put global Britain at the heart of the Indo-Pacific region—one of our key strategies—which now represents 40% of global GDP and has most of the world’s fastest growing economies. As they expand, it is key that we have access to their markets.
An agreement with India would complement our other commitments, such as those to Australia and New Zealand, and the ongoing negotiations with the other 11 members of the CPTPP. Tilting towards the Indo-Pacific would diversify UK trade, make our supply chains more resilient and make us less vulnerable—particularly on a day like today—to political and economic shocks around the globe. It would also cement our position as a world leader in free trade and strengthen democracies around the world, which can only be a gain for India and for us.
I will not go through the many benefits of free trade agreements, as I know a number of hon. Members want to contribute to the debate. But let us be clear: reducing barriers will make trade easier and cheaper for UK exporters, as well as improve choice for UK consumers.
In 2019, India imported £5.35 billion-worth of goods from the UK, of which £5.24 billion was in lines subject to tariffs. That gives a feel for how much opportunity exists. Removing those tariffs would enable us to double our exports to India. India’s middle class, which I mentioned earlier, is expected to double from 30 million people in 2019 to 60 million by 2030, reaching nearly 250 million in 2050. If that is not an opportunity, I do not know what is.
We will have huge opportunities to sell high-quality iconic brands and products. Removing tariffs and giving greater clarity on legal certainty would support our UK businesses, such as those in the automotive, agrifood, machinery and pharmaceutical industries, to name but a few. That would also mean our manufacturers saving costs by getting cheaper parts for products, while our consumers in the UK would benefit from the variety and affordability of different products.
The opportunities for UK services and investment are huge. At the moment, they amount to £3.2 billion. The fact that the expanding services sector in India is expected to reach 54% of its economy demonstrates the opportunity for us as a trusted partnership.
Mark Garnier (Wyre Forest) (Con)
My hon. Friend is making a strong point about how reducing barriers to entry will increase trading opportunities with India. Does he agree, however, that it is the job of the Department for International Trade to do not only trade policy but trade promotion? The Tradeshow Access Programme and other good innovations are required to support British businesses that are seeking to take advantage of opportunities. I look forward to the Minister’s explanation of what goes on in his closing speech.
Bob Blackman
My hon. Friend is a former Trade Minister who knows such things all too well. Those go hand in hand—it is no good having a free trade agreement if we do nothing with it. Indeed, before we get to the free trade agreement, we have to use the opportunities we have in the diaspora here and all the other opportunities for trade.
There is also a great opportunity in the digital sector. The Government of India aim to have a $1 trillion online economy by 2025. We expect internet penetration in India to hit 50%—or 622 million users—so the free trade agreement represents a huge opportunity for businesses in the UK, such as those in tech, artificial intelligence and cyber-security.
A trade agreement will not only build on our relationship but give young Indians the opportunity to come to this country to study—to get their degrees, master’s degrees and PhDs—and to return to India to use the knowledge that they have gained in friendship with the UK and to expand India’s economy even more. We already have excellent educational co-operation, in particular with our higher education facilities, but I want to see us do better. I want us to get back to the position where the UK is where India chooses to send its young people to for study. We have slipped behind in recent years, and myths have developed about caps on numbers. Those are problems to resolve—we know that—but nevertheless we want to return to the position whereby we are the place of choice.
Indian-owned businesses in the UK employ more than 95,000 people. Some 29,200 are employed in the west midlands alone—at least one west midlands MP, the right hon. Member for Walsall South (Valerie Vaz), is present—with 20,700 in London and 10,700 in Wales. Indian investment alone created 15,000 new jobs in the past three years. That demonstrates our opportunities to expand. Furthermore, India’s import requirements are set to be worth £1.38 trillion in 2035, which gives us an opportunity—if we can reduce the high tariff barriers—to utilise our capability to provide a high level of services and good-quality goods.
The tariffs paid on exports to India total £49 million a year. The tariffs for automotive manufacturers stand at 125%, so a trade agreement would obviously benefit them. In 2019, 9,900 UK businesses exported goods to India, 98% of which were small or medium-sized enterprises. That demonstrates that it is not only big companies but small companies that could gain.
We are a global leader on climate action, and the Government are obviously maintaining our high standards of environmental protection within trade agreements. An agreement with India could represent a huge opportunity for our world-leading renewable energy industry. The Government of India recognise the need to transition towards renewable gas and plan to install 175 GW of renewable energy capacity by the end of this year. Our expertise can help them to achieve that and to remove their dependence on coal and other fossil fuels. Although we already have a productive trading relationship, it would also help us to bounce back from the pandemic and to invigorate trade and investment services.
The reality is that our negotiation stance needs to be clear and above board, and we need to be clear that India was the UK’s 15th largest trading partner in 2020. As I have said, trade was worth £23.3 billion and our exports worth £8.5 billion in 2019. That makes India the 10th largest export destination for the UK. Outside of the EU, that clearly provides us with a huge opportunity. Imports were worth £14.8 billion in 2019, which was 2.1% of our imports, making India the UK’s fifth single largest import supplier. India is now the fifth largest economy in the world and the third biggest investor in the UK. We have slipped down the list on investment in India, and we need to put that right as we go forward. We were the third biggest investor in India, but I think we are now fifth or perhaps even sixth. India is the second most populous country in the world, with 1.38 billion people back in 2020, which amounts to 18% of the world’s population. I am throwing out a lot of stats, because we need to understand the huge benefit that can result from having a free trade agreement with India.
Obviously, under covid, both our economy and India’s economy contracted, but as they expand we will have an opportunity to get involved in further investment in India. At the moment, India is projected to overtake Germany and become the world’s fourth largest economy by 2030, and it could leapfrog Japan to become the third largest by 2050. The opportunity there is huge, and India has obviously been the engine of global growth over recent years, with its economy growing by 7% a year. If we could grow our economy by 7%,- wouldn’t we bite people’s hands off to achieve it? Clearly, that is going to be the position. I have mentioned India’s middle-class market, which is growing fast and which is a huge opportunity for us overall.
With a free trade agreement with India, we can obviously support jobs across the UK. If our exports to India grow, we can grow our businesses, and SMEs will grow as a direct result. In 2019, something like 1,000 Indian-owned local business units were operating in the UK, so clearly the opportunities are there and the demand for imported goods and services will grow as we use the living bridge between the United Kingdom and India.
Obviously, the success of exports to India will depend on how well the world economy goes and how our relationship grows with it. As I understand it, the second round of negotiations is due to take place between 7 March and 18 March, with a shared ambition to conclude negotiations by the end of this year. I wish those negotiations well, and I hope the Minister will be able to update us on the position when he responds to the debate.
Looking at the various parts of our economy, there are huge benefits right across the UK to having a trade agreement with India. One of our hugest exports is Scotch whisky. That has a huge impact. Those of our Scottish friends who are present—the hon. Members for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), for Glasgow East (David Linden) and for West Dunbartonshire (Martin Docherty-Hughes)—know that they will gain as a result of a global Britain free trade agreement. If they were to engage in foolish behaviour and leave the United Kingdom, they would lose that free trade agreement and once again face tariffs of 150%. Indeed, the export of Irish whiskey is a vital part of the Irish economy and will clearly be—
Bob Blackman
I have had the opportunity of sampling Irish whiskey on many occasions.
David Linden
I am grateful to the hon. Gentleman for giving way. I think he has given me this opportunity before gets himself into a bit of a hole. First, he had a pop at independence, only to then turn it into saying how successful Ireland is. I am grateful to him for that, but I thought I would give him the opportunity at least to try a glass of water, if not some whisky.
Valerie Vaz (Walsall South) (Lab)
I take issue with one or two of the points that the hon. Gentleman has made. He spoke cleverly about what the UK can do for India, when the reality is clearly the reverse: we have imported fantastic, highly educated doctors, nurses and IT people.
He talked about whisky; I hope he does not intend for India to become a land of alcoholics. I would like to share an example from my youth of India’s innovation: instead of importing Coca-Cola, it made its own version, Thums Up. It is a very innovative country. I would like to correct the record slightly: our parents and grandparents would not forgive us if we did not say that they were also highly educated and innovative.
Bob Blackman
I thank the right hon. Lady for that intervention. Clearly, the living bridge, as I have described it, of citizens of Indian origin in the UK is not only highly educated, but has the opportunity to build that relationship still further. Equally, there is a potential opportunity for people of UK origin to study at universities and other educational institutions in India. I look forward to those important exchanges taking place.
There is clearly a huge opportunity for us to go forward. The opportunities that arise from a potential free trade agreement are legion. To come back to whisky and the huge 150% tariff, with respect to the right hon. Lady, India manufactures its own whisky, which is a good product but clearly no substitute for that from global Britain. Negotiating that tariff down will be a prize and a huge advantage for our exports to India. It is a premium product that is well respected by the middle classes across the piece, and very welcome.
I will not trouble colleagues further because I know others want to contribute. The opportunities are huge, and it is up to us to grasp that nettle. I look forward to the Minister’s reply to the debate, including the opportunities, our negotiating position, how negotiations are going and how much progress we have made. If we bring off this free trade agreement, it will be a feather in the Government’s cap. More importantly, it will be a huge opportunity for the United Kingdom and India to cement our long-term relationship.
Several hon. Members rose—
Philip Davies (in the Chair)
There are five Members seeking to catch my eye. I do not intend to introduce a formal time limit, but I think everyone can do the maths. I want to get to the Front Benches no later than 10.30 am. If we look at around seven minutes each, everyone will get a fair lick of the sauce bottle.
Mr Virendra Sharma (Ealing, Southall) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies, although not for the first time. Thank you for calling me to speak on this very important matter. I would also like to thank the hon. Member for Harrow East (Bob Blackman) for securing this debate, which I know is of great interest to his constituents as well as my own. I feel a little sorry for myself that I missed the opportunity to lead the debate; however, he made a good opening.
Trade with India has long been a British obsession and I am delighted that now, 421 years on from the founding of the East India Company, it is a little less one-sided. As the chair of the Indo-British all-party parliamentary group, I should declare an interest in this debate. However, my connection is even deeper, as I am not only a British citizen but also a son of India. It is one of my most fervent beliefs that India and the UK are natural friends and allies, with shared values and complementary skills and strengths. A deep and strong alliance is both possible and desirable.
Prime Minister Modi has made it very clear that he views Britain as India’s natural ally. India is bursting with opportunity from which both the UK and India can benefit. There is a massive and growing middle class, a highly educated workforce and demand for services. The future can have so much more to offer than the past. There are nearly twice as many English speakers in India as in Britain, and that number is expected to increase over the coming decade. It could double—triple; numbers are high.
In India there is a connection to Britain that extends beyond the similar legal system, parliamentary democracy and cricket—it is deeper. We may have chosen to stifle trade with Europe and thumb our noses at our nearer neighbours, ending the opportunities that India had to invest in the UK as a jumping-off point into Europe, but that is not all that we have to offer. We must offer something different, but perhaps we should try to avoid further reducing our competitiveness. A free trade agreement may be this Government’s stated aim, but I urge them to seek wins that build into an FTA, not look for a hole-in-one. Education and legal services are ripe for a sector-specific deal. Defence and security would not just be a boost to British design and manufacturing, but have the opportunity to support an Indo-Pacific “tilt” strategy. The Australia submarine deal shows that we have a sector brimming with talent, in demand around the world. Let us compete in space, cyber and aviation. The UK built the first jet airliner. Let us again sell them around the world, and fill Airbus planes with Indian students coming to British universities for a world-class education.
As we heard, in the past we have missed some opportunities. Britain did not stay on top of competing with other countries. Still, British universities and the British education system are popular among Indian students. We should look seriously at how we can further engage that relationship. On that point, I want to commend the excellent work of British universities in attracting Indian students despite the hard work of our Prime Minister’s predecessors to dissuade as many students as possible from coming to the UK. We must accept that it was our failure, not a lack of interest among students back in India. It should not be seen as a criticism, but as a policy matter we must look at how we can improve those relations further to bring those students into the country.
The new post-study visa is a good step, and the numbers from UCAS last week show that it is having the right impact. There is no doubt, then, of the value of an FTA for the UK and India, but experts I have spoken to think it will not be possible to secure one in the next decade or more. Instead, we should seek to nail down the wins that we can now, and work towards an FTA. That should not be for an election stunt but for the long-term success of the British economy.
I also urge the Government to take international promises seriously. This Government have been blamed, time and time again, for interesting interpretations of trade regulations and agreements with the EU. We risk further serious international reputational damage if we are seen to renege on trade deals that we have written and agreed. We can show how serious we are by respecting and taking full advantage of deals already in existence and in the pipeline. I look forward to seeing the sector deal for fruit ripen and the medical technology deal birthed in good health. Two countries, both alike in dignity, can put aside ancient grudge and break new ground with an ambitious deal for civil hands in both nations.
Navendu Mishra (Stockport) (Lab)
It is a pleasure to serve under your chairship, Mr Davies. I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this important debate. It is also good to see many members of the Indo-British APPG. I serve as its secretary, so I wish to declare that interest. I am also grateful to both its co-chairs, the hon. Member for Harrow East and my hon. Friend the Member for Ealing, Southall (Mr Sharma), who do a lot of work to keep the APPG going, and also to my right hon. Friend the Member for Walsall South (Valerie Vaz).
I will start by talking about the Manchester India Partnership, which covers the Greater Manchester region, including my constituency of Stockport in south Manchester. It was set up in 2018 and has won several awards. Its main objectives are to link academic institutions, businesses and public sector organisations across Greater Manchester and India. Those are excellent objectives. I am sure that the House will join me in congratulating Shehla Hasan, who has been appointed the new executive director for the Manchester India Partnership.
It is good to see the Mayor, Andy Burnham, and the 10 local authorities in Greater Manchester working with the Manchester India Partnership to attract investment into Greater Manchester, but also to attract investment from British businesses, organisations and academic institutions into organisations across India. It should be highlighted that Greater Manchester is the first UK city region to sign a memorandum of understanding with the regional Government of the Indian state of Maharashtra. That was recently signed between Mayor Andy Burnham and a Minister from Maharashtra, and should be celebrated.
As MP for Stockport, I want to see more investment from Indian businesses in my constituency into Greater Manchester, and vice versa. I also hope that when the Minister speaks, he will support the Manchester India Partnership and outline how the Government will support not only regional partnerships—such as the Manchester India Partnership—and the UK India Business Council, but also the initiative in the west midlands.
I believe that this debate is about trade, but I also want to mention the lack of air connectivity between Manchester and India. Manchester airport is the third-largest airport in the UK and serves people from the north of England, Scotland, and even Wales. Some 537,000 people of Indian ethnicity live within a two-hour drive of it. It is not good—unhelpful, even—that Manchester airport currently has no direct flights to major Indian cities. It used to have links to Mumbai and Delhi, but because of the pandemic those infrequent links, which were weekly, have stopped. I hope that the Government will do something about that. The large, vibrant Indian community in Greater Manchester and the north-west region have been calling for direct air links from Manchester to major Indian cities and, as a bare minimum, direct links to Mumbai—the trading hub of India—and the capital, New Delhi. It is a long time coming, and I hope the Government will do something about that.
Having spoken to them recently, I know that Manchester Airports Group are very keen to start routes to India. I hope there is a commitment today from the Minister that the Government will deliver that. Direct air links will deliver better connectivity for families, businesses and academic institutions. My good friend, my hon. Friend the Member for Ealing, Southall, mentioned the large number of Indian students who study in the UK, as well as businesses and people visiting on vacations. These are people who are choosing to spend their time and money here and we should make it easier for them.
Moving on to the student community, the UK has an excellent educational offer; we attract students from around the world and that is a very good thing. However, I am disappointed that the Government did not do enough at the height of the pandemic to support overseas students. Some struggled badly, and more should have been done. Some students faced extremely serious hardships, struggling to feed themselves and facing issues with rent and landlords. Several organisations, up and down the country, did a lot to support those overseas students and I am very grateful to them. I particularly thank the Indian Association Manchester: Dr Gajanan and Councillor Vimal Choksi went above and beyond to support students, some of whom were in desperate situations, and I am grateful to them for that. I think the Government should have done more, and going forward, if we are going to attract foreign students—which is a good thing—we should make sure that we are able to support them better in the case of a lockdown, in the case of a pandemic.
Over 53,000 students of Indian heritage studied in the UK last year. I believe the figure for the next academic year is close to 84,000—and that is just students from the Republic of India. That shows the growing number of students coming from India to the UK. I hope that part of the free trade agreement provides better support for those students. Over the weekend there have been some media reports about élite Indian universities setting up campuses in the UK; I hope that the Minister will outline how the Government will support that. We want the best and the brightest, and we also want to encourage the exchange of knowledge, ideas and people between those institutions.
I will finish with two points. Climate change is a very serious issue; India and the UK can do so much together to combat climate change and preserve our natural environment. I saw a report recently that India has increased its solar power capacity by more than elevenfold in the last five years; that is just one example of things that are going on in India. The UK and India could lead on green technology and renewable sources, but we need the vision and the investment.
When we talk about trade, we should do so on an equal footing and on collaborative terms. It is all well and good for the Government to say that they want to pursue a free trade agreement with India, but when recently South Africa and India made a joint proposal for a time-limited, temporary waiver of the World Trade Organisation agreement on trade-related aspects of intellectual property rights in order to allow the production of vaccines, medical equipment and medicines to fight the pandemic, the UK Government were part of a small minority that blocked the proposal. Personally, as a British Member of Parliament, I think that is shameful. On the one hand, the Government are saying that they want a free trade agreement on equal terms, while on the other they are blocking a proposal that would enable low and middle-income countries to vaccinate their populations. While we in more advanced economies talk about the second dose, the third dose or the booster dose, around 80% of people on the continent of Africa have not even had their first dose. President Biden’s Administration were with the UK in blocking the TRIPS waiver. However, they reversed their position and said that they were wrong, and that they would support the proposal from India and South Africa. I am sorry to end on a negative note, but the Government have clearly failed on that. They say one thing on the free trade agreement, but do not support a very reasonable proposal for low and middle-income countries.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
It is good to see you in the Chair, Mr Davies. I thank the hon. Member for Harrow East (Bob Blackman) for securing this debate.
It has been interesting and, in many ways, encouraging to hear the enthusiasm that Members across the House have for increasing links with the Republic of India. While some from my party and my part of the world can only support increasing trade, commerce and understanding between democratic peoples, I am one of the few discordant voices in this debate. I have to ask whether that is truly appropriate at this moment, especially while my constituent, Jagtar Singh Johal, remains arbitrarily detained in a maximum security prison.
Having served as a member of the Defence Committee for five years, I am under no illusions as to the importance of maintaining good relations with India. It remains the largest democracy in a region where it can sometimes seem that anti-democratic voices have the upper hand. However, being a member of the Committee also meant I had more time than most to read last year’s integrated review and that I was fortunate enough to meet many of the people who wrote it.
The fine balance between interests and values is a major theme throughout the review and is something that we should continue to reflect on. On page 17, the review states:
“In the years ahead we will need to manage inevitable tensions and trade-offs: between our openness and the need to safeguard our people, economy and way of life through measures that increase our security and resilience; between competing and cooperating with other states, sometimes at the same time; and between our short-term commercial interests and our values.”
What about our Prime Minister? We know that he is, of course, a man of his word. In his introduction, he says that,
“By 2030, we will be deeply engaged in the Indo-Pacific as the European partner with the broadest, most integrated presence in support of mutually-beneficial trade, shared security and values.”
I would like to linger on the last word: values.
My constituent Jagtar Singh Johal was shopping with his newlywed wife in Jalandhar city on 4 November 2017 when he was suddenly assailed by persons in plain clothes who did not identify themselves. They bundled him into a van before speeding off, leaving his new wife distraught at the side of the road. It was not until he got to Bagha Purana police station that he realised those people were law enforcement. However, if that realisation made him think he would be dealt with humanely, he was wrong.
Jagtar alleges that from 5 to 9 November, the police interrogated and tortured him, including by means of electric shock to his genitalia, forcing his limbs into painful positions and depriving him of sleep. That torture is probably what contributed to Jagtar signing a confession and making a video confession that later appeared on prominent Indian news sites, both of which he subsequently retracted.
I have spoken about Jagtar’s case on many occasions in the House and I will continue to do so until he is released. Due to the time constraints we have today, we will have to gloss over almost five years in captivity, a move to a maximum security prison and the gradual realisation from all working on this case that we were dealing with arbitrary detention.
In my Westminster Hall debate last year on Jagtar’s case, I unfortunately did not hear any justification from the Foreign, Commonwealth and Development Office as to why it did not consider Jagtar’s detention to be arbitrary. However, I fully intend to make the FCDO justify that decision whenever I can. We should ask ourselves if we consider the treatment of Jagtar to be consistent with the pursuance of shared values in the UK’s foreign and trade policy.
My constant refrain during Jagtar’s detention has been for transparency, due process and the rule of law to be what the Republic of India is judged on by both the citizens of that mighty country and the FCDO. The integrated review quite clearly states that,
“we will increase our efforts to protect open societies and democratic values where they are being undermined”.
There is more than enough in this one case for me to ask all Members present, including the Minister, at what price do we pursue this deal? At what point is it incumbent on the UK as a state that seeks to protect open societies and democratic values to act when they are demonstrably not being adhered to? While it is, of course, for the people of the Republic of India to decide how they are governed, it is for us as democratically elected parliamentarians to decide how we sign free trade deals with them.
I hope I have made it clear that, although the benefits of free trade and cultural exchange are undeniable, they should not be pursued at any price. They should certainly not be placed above the wellbeing of individual UK citizens such as Jagtar Singh Johal.
David Linden (Glasgow East) (SNP)
It is a pleasure to follow my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes). I too put on record my support for Jagtar Singh Johal, who is a son of the Rock. I congratulate the hon. Member for Harrow East (Bob Blackman) on securing and opening this important debate.
As chair of the Scotch whisky all-party parliamentary group, I understand the importance of securing a good trade deal with India, especially for the Scotch whisky sector. The industry breathed a huge sigh of relief at the removal of tariffs for Scotch whisky in the United States. However, it only came after significant effort on the part of the APPG, the Scotch Whisky Association and countless industry stakeholders. The industry continues to face yet another barrier at this time in India, where Scotch whisky faces an eye-watering 150% tariff.
India is the world’s largest whisky market, which provides huge potential for the entire Scotch whisky industry. However, the fact that Scotch exported to India is subjected to that 150% tariff is a massive blow to the sector. Because of the steep tariff, Scottish produce makes up only 2% of India’s whisky market. Despite only making up this very small percentage share of the market, the value of Scotch whisky sales continues to rise. Whisky sales rose from less than £60 million in 2011 to more than £150 million in 2019. Just imagine the opportunities for what is, I would argue, our greatest export brand if the 150% tariff were reduced. The Scotch whisky industry could rise to its true potential in India.
A reduction in the tariff on Scotch whisky would grow single malt exports by £1.2 billion over the next five years and create 1,300 jobs. In my Glaswegian constituency, I am privileged to have a bottling hall, a maturation warehouse and a number of cooperages. There is clearly an argument that this investment has an impact on jobs, not just in rural parts of Scotland, but in urban constituencies like my own.
India is already the third largest market by volume. The reduction of tariffs could push it to second place, behind only the United States of America. It would see an increase of £3.4 billion in revenue to the Indian Government. There is a huge potential for the market to grow if tariffs were reduced. In 2019, Scotland only constituted 6.5% of the UK’s overall trade with India, compared to London at 21%, the south-east of England at 14% and the north-west of England at 9%. There is clearly an opportunity for Scotch whisky, if only it were not hindered by these incredibly high tariffs.
The whisky market in India is a wholly untapped, golden opportunity for Scottish distilleries. Scotch whisky plays a crucial role in the success of Scotland’s food and drink sector and our economy, but the industry has been dealt a triple whammy recently, with the economic impact of tariffs—particularly in the USA—as well as Brexit and the pandemic. Going forward, we need to see continued and intensified support for the industry. One step could be to address the extortionate tariffs in India. I hope that my good friend the Minister, and the Government, will address this in conjunction with the APPG, so that together we can support Scotch.
Jim Shannon (Strangford) (DUP)
I thank the hon. Member for Harrow East (Bob Blackman) for introducing the debate in a consistent, helpful way. I am pleased to follow the contributions of the hon. Members for Glasgow East (David Linden) and for West Dunbartonshire (Martin Docherty-Hughes). The hon. Member for West Dunbartonshire knows that I have supported him in the campaign that he has consistently been involved with over the years and in every one of his debates, and I support him here today in urging the Minister to do something. It may not be too late for that plea to the Minister and to the Government to do something to help the hon. Gentleman’s constituent, who has been very wrongly maligned, intimidated, tortured and injured, and his family.
Holding each other accountable to a higher standard is a hallmark of any good relationship. Ours with India should be no different, which is why what the hon. Gentleman said is so important. There has been colonial and historical contact, and that has drawn us together over the years. I see—we all see—India as a friend and the close relationship between the UK and India is well known. A long history of international co-operation and trade has been central to much of that. Our trading relationship is significant and, therefore, I believe we need to have a relationship that draws on our concerns in this country. I will lay out some reasons for that.
The UK is the third biggest investor in India, and in 2020 India became the second largest investor in the UK. Our relationship is growing from both sides and that is important. During the covid-19 pandemic, trade with India secured vital personal protective equipment for our frontline workers, and helped to secure the production and roll-out of the Oxford-AstraZeneca vaccine on such a mammoth scale. The history and our relationship over the last 100 years—especially over the last two—have been significant and important.
It goes without saying that the UK-India relationship is mutually beneficial, and that underscores why a trade deal with India is and should be such a priority. However, in trade negotiations we should not ignore the values central to a good relationship for the sake of a better trade deal. The close relationship between the two countries necessitates that our Government and our Ministers raise the issue of human rights concerns in negotiations with India. Will the Minister confirm that the issues are constantly raised with India? I am quite sure that the answer will be yes, but will the Minister confirm that in Hansard, so that we have it to refer to for the future?
I am sad and sorry to say this, but in recent years India has seen escalating violations of freedom of religion or belief. Churches and Christian schools were targeted during the Christmas season just past. Bibles were set on fire, services were disrupted, a statue of Jesus was torn down and the crowd shouted, “Death to missionaries”. Really? In this modern world? We have this relationship with India, but the Indian Government have not acted on those issues. In 2013, the Open Doors world watch list ranked India as 31st in the global list of the top 50 countries where Christians faced the highest level of persecution worldwide. Last month, in its latest world watch list, Open Doors ranked India in 10th position; it has risen from 31st to 10th. The research sounds the alarm on the escalation of freedom of religion or belief violations in the country—not just against Christians, but against other faiths and beliefs too. I will quickly speak of them.
Lynchings and hate speech targeting Muslims in India have repeatedly made headlines. In December last year, there were open calls for genocide against Muslims at a Hindu Mahasabha party conference. That should never happen at any Government conference or any party conference. The marginalisation of Muslim women was evidenced last month when schools and colleges in the Indian state of Karnataka banned the Muslim headscarf. Indeed, Malala Yousafzai has since responded to colleges forcing Muslim girls
“to choose between studies and the hijab”—
in short, to choose between their right to education and their right to freedom of religion or belief. That must stop. Can the Minister give some indication of how we are encouraging India to do just that?
David Linden
I am glad the hon. Gentleman has touched on that. I discussed the issue in a meeting with the Prime Minister. Thankfully, there was an undertaking that he would raise the issue. Does the hon. Gentleman agree and accept that a lot of the behaviour stems directly from Prime Minister Modi and the various thugs in his party who think that such behaviour and intolerance towards people of a different faith is somehow normal? We need to send a very strong message from London to the Indian Government that we will not accept such behaviour and that we will raise it during the negotiations.
Jim Shannon
I agree that there is an onus on Prime Minister Modi to speak out. Unfortunately, we have not seen much evidence of that. If he speaks out, there should be a reaction, and those who listen to him might respond in a positive fashion, but that has been lacking so far. However, I hope that we can have such a response.
I believe that there is hope and I want to reflect on that as well. Human rights provisions in international trade deals have become the norm since the early 1990s. More than 75% of the world’s Governments now participate in preferential trade agreements with human rights provisions, and we should participate as well. European Union international trade agreements include human rights clauses and a general obligation to uphold human rights as set out in the UN universal declaration of human rights, so what are we doing to make sure that that is upheld?
Leaving the European Union has enabled us—I say this with great respect to colleagues on my left-hand side, the hon. Members for Glasgow East and for West Dunbartonshire—to pursue an independent trade policy. It is vital, however, that we do not drop human rights provisions in that endeavour and that we appropriately use free trade agreements to pursue our broader international objectives.
The UK has a history of defending human rights across the world and is a leader in protecting the fundamental right of freedom of religion or belief. I recognise the good work that our Government have done on these issues, but there are occasions when we have to speak up in a gentle but firm fashion to say that things are not right. The right to freedom of religion or belief is a gateway right and a strong indicator of the future trajectory of the human rights landscape in a country. That is where the focus must be in India, so we seek that change. Religious or belief minorities are often the first groups to be targeted before other rights are eroded, so the right to freedom of religion or belief is well placed to be an indicator of human rights provision in a trade deal with India. I am confident that the Minister’s response will endorse our concerns and deal with how we can make things better.
I am mindful of the time, so I will conclude by urging the Government to ensure that human rights provisions are included in the text of future trade deals with India, that those provisions include robust monitoring and enforcement mechanisms, that the right to freedom of religion or belief is part of that framework, and that the Prime Minister of India takes the lead on this issue. If we hope to nurture a sincere relationship with India—I hope we do; I want us to—Government silence on the matter cannot be tolerated.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Harrow East (Bob Blackman) on securing this important debate and on his dramatic entrance; it is always good to get off to a start like that.
There has rightly been a lot of talk about the opportunities for friendship, trade and progressive agreements with India. Those matters should be at the forefront of our minds when we talk about engaging with any other country. It is also important, as we have heard from hon. Members around the Chamber, to make sure that when we talk about friendship and being good friends, we are open and honest and call out the things that are not acceptable. I intend to do that in my comments.
The hon. Member for Harrow East talked about the difficulties in gaining a trade agreement with India. The EU has 445 million people, the US has 331 million and the UK 68 million, so there will be difficulties in gaining agreements, and standards must not be sacrificed to get those things across the line. I welcome his comments on protecting the NHS. I hope he will work with me to make sure that the Government pay close attention to not including things such as investor-state dispute mechanisms that could undermine the NHS in future trade deals.
The right hon. Member for Chipping Barnet (Theresa Villiers) is no longer in her seat, but when we talk about being open, we have to be clear about what the situation is in India. Two thirds of Indian people live in poverty. We have to realise that not everybody there is wealthy. Nearly 70% of people live on under $2 a day. That leaves the situation open to worker exploitation. In any trade deal, we must be mindful of that situation.
Hon. Members have talked, quite rightly, about honouring agreements. That is absolutely essential. This Government must reverse some of the precedents that have been set over recent months. They have to show that they are willing to understand and undertake the conditions of international law; if they do that, they will have the moral authority to hold others to those conditions.
It is absolutely right to point out human rights issues in India. I will come on to some of the opportunities in a moment, but I will pause on the point made by my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes) about his constituent Jagtar Singh Johal, who has been held for four years without charge. There are many other concerns, including the filing of criminal charges against students, journalists and private citizens in response to speeches seen as critical of the Government. As the hon. Member for Strangford (Jim Shannon) pointed out, in 1995 the EU agreed that every new trade deal would take human rights as an essential criterion. Will the Minister uphold the same principle, or will he let these things slide, as the Foreign Secretary did with the principles in the deals with Turkey, Singapore and Vietnam? The Minister should tell us.
My hon. Friend the Member for Glasgow East (David Linden) highlighted an enormous opportunity to fix a long-held barrier to exports for Scotch whisky. The punishing 150% tariffs applied to this premium Scottish export have been in place for far too long. The UK Government have been tardy, to say the least, in addressing that. We have seen no urgency from the UK Government to rectify the situation until now.
As we have heard, India is the world’s largest whisky market, and yet the quality produce from Scotland makes up only 2% of that market. Despite that, because of the vigorous marketing of high-end product by the Scotch whisky industry, the value of whisky sales has risen from less than £60 million in 2011 to more than £150 million in 2019. There is clearly a demand and an appetite for whisky in India. A reduction in that tariff would grow single malt exports by £1.2 billion in the next five years and could create 1,300 jobs, but that depends on serious action on tariffs. Could the Minister tell us what efforts are being made to remove the 150% tariff, or what reduction to it is being sought? That should not be a secret. It is not a negotiation issue; it should be something that is simply dealt with.
We have heard mentions—too few mentions—from hon. Members of climate change. This is an absolutely pivotal issue that should be at the front of our discussions. There are export opportunities for the Scottish renewable energy manufacturing sector if the conditions are put in place. The Indian Government plan to install 175 GW of renewable energy capacity this year, and they are aiming for further capacity developments over the coming decades. Currently, however, wind turbine components made in the UK are subject to import tariffs of 15% in India. Scotland has the world’s largest research group of renewable energy experts: more than 700 scientists, engineers and more. That is an opportunity.
Navendu Mishra
Part of the “build back better” slogan has to be good, well-paid, unionised jobs in the UK. The UK can be a world leader in green technology and technology transfer, and it can lead from the front on renewable energy. Does the hon. Member agree that as part of the free trade agreements that the UK signs with other nations, we should encourage those nations to sign up to the principles of renewable energy? Does he also agree that we should use those agreements to increase industrial capacity in the UK and produce good, well-paid, unionised jobs that support our constituents up and down the country?
Drew Hendry
Absolutely; I am in complete agreement about those opportunities. It is important to underline that climate change was not solved at COP26; some good agreements were reached there, but it is clear that a lot more needs to be done. All those things need to be taken into account when it comes to a trade deal. India and the UK have considerable and long-standing social, cultural and economic ties. India is a rising world power, and it is impossible and impractical to ignore the south Asian giant. However, as I have said, friendly progress should be made with eyes open to the issues that exist.
None of the proposed trade deals, including this one with India, can make up for the trade disaster that is Brexit. The Office for Budget Responsibility estimates that Brexit will lead to a reduction of 4% in UK GDP. The hon. Member for Harrow East talked about coming back from covid. By comparison, the OBR estimates that covid will only cause a 2% fall, so Brexit is likely to have twice the impact.
According to predictions by the National Audit Office, all the FTAs—those with Australia and the US, and the CPTPP—will increase the UK’s GDP by between 0.33% at best and 0.17% at worst. Brexit has already cost the Scottish economy around £4 billion and could slash Scotland’s GDP by up to £9 billion by 2030.
There are other issues, but lack of time prevents the full exposition of them all. This is a wide-ranging subject and an enormous debate, given the sheer size, scope and industry of India and the opportunities that might be opened up there. However, there are some key points that I want to touch on, so that the Minister can respond to them. These are important things.
In India, produce—rice, in particular—is grown using pesticides that are currently banned from use in the UK. Can the Minister confirm that such produce will never be imported for sale in UK shops? What concerns has he raised with his team and colleagues about microbial resistance, and will he confirm that any FTA will commit to addressing the very real concerns about it? Will he commit to ensuring that there is a robust chapter in any FTA within the legal services text that takes into account the unique nature of Scottish law?
I put those questions to the Minister. I know, and he knows, that he will be asked many more questions about this wide-ranging subject in the coming weeks and months. However, several of the questions I have asked demand an answer—not least those about his ambition for the reduction in tariffs such as 150% on Scotch whisky and 15% on renewable parts, but also those relating to human rights commitments, the protection of UK standards on pesticides and genetic modification, and ensuring that we get an open and honest trade deal that protects the human rights of those involved with it.
Gareth Thomas (Harrow West) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Davies. I find myself in the most uncomfortable position of having to praise my neighbour, the hon. Member for Harrow East (Bob Blackman), for his speech; for the first time in a long time, I agreed with more than 50% of what he said.
The hon. Gentleman and the Backbench Business Committee have done the House a service in giving us the opportunity to begin scrutiny of a trade agreement. I hope that the contributions by the hon. Member for Wyre Forest (Mark Garnier), the right hon. Member for Chipping Barnet (Theresa Villiers), my right hon. Friend the Member for Walsall South (Valerie Vaz), my hon. Friends the Members for Ealing, Southall (Mr Sharma) and for Stockport (Navendu Mishra), and the hon. Members for West Dunbartonshire (Martin Docherty-Hughes), for Glasgow East (David Linden) and for Strangford (Jim Shannon) will serve to jog the Minister’s memory about the need to improve scrutiny arrangements for the trade deals that this country begins to enter into. In particular, I welcome the fact that the hon. Member for Harrow East underlined the need to maintain environmental, animal welfare, food and safety standards, and to ensure that there is no retreat on protecting the national health service.
At the outset, let me state clearly that the official Opposition welcome and support the opening of free trade agreement negotiations with India. Given how underwhelming the Government’s record on trade has been of late, the signing of a comprehensive free trade agreement with India that could unlock significant export opportunities for British businesses and help to create significant numbers of new jobs in the UK would be very welcome. However, very few in the business community seem to have much confidence in the Government being able to negotiate any time soon the comprehensive free trade agreement that the Prime Minister has promised us all. There are increasing whispers that Ministers are focusing only on what would be billed as an interim agreement. I hope that turns out not to be true, but that apparent loss of nerve and ambition would be disappointing.
Given that Ministers have negotiated a trade agreement with Japan that, according to the Government’s own figures, is set to benefit their exporters four times more than ours; that provisions on labour and human rights have been dropped from many of the roll-over deals—a point made by the SNP spokesperson, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—and that a deal with Australia is set to deliver a £100 million hit to British farmers, fishing and food firms, Ministers should not be surprised by the growing scepticism about whether they will be able to put together a genuinely exciting free trade deal with India.
I am afraid that the story of the last 10 years of Britain’s trade with India has been underwhelming. The hon. Member for Wyre Forest, who is no longer in his place, made a pointed intervention on the hon. Member for Harrow East about the Tradeshow Access Programme, no doubt with that in mind. Figures from the House of Commons Library demonstrate that British exports to India dropped by 3% in the years between 2010 and 2019. Canada saw a 62% increase in trade with India over that time, and the French saw a 58% increase over the same period. Every other country in the G7 saw faster growth in their trade with India. There was also an average increase in trade with India across the European Union, without the EU-India free trade agreement having been made. Even Italy performed better than the UK.
After that decade of disappointment, it is high time that Ministers gave Indian markets some serious attention. It is no surprise that as far back as 2018, the Indian Government, through the High Commission here, were asking when Ministers were going to get their act together on trade with India.
Action by the previous Prime Minister on visas, of the sort alluded to by my hon. Friend the Member for Ealing, Southall, or the failure to support India’s call for a temporary trade-related intellectual property rights waiver, as my hon. Friend the Member for Stockport underlined, only add to the concern about whether Ministers are genuinely serious about engaging properly with their counterparts in India. To complement free trade agreement discussions, a strategy to boost exports to India is now needed. That can be built on if and when any agreement with India is achieved.
I hope the Minister will be able to explain, as the hon. Member for Wyre Forest asked, what extra support is being provided to firms that have the potential to export to India but are not yet doing so. If France, Germany, Italy and the EU more generally can all perform better without an FTA in terms of growth in their exports to India, Ministers need to be doing more to help British exporters. How many trade missions are planned to India in the next 12 months? Are extra staff going to be deployed to support export growth in India? How are Ministers going to improve the online help to businesses that want to export to India? I am told that it is weaker than that of our rivals.
India is one of the world’s largest and fastest growing economies, and it is set to become the world’s third biggest economy by 2050. Given that India has a population of almost 1.4 billion people and a growing middle class, a trade deal would increase British business access to a huge consumer base and, according to the CBI, potentially boost wages in the UK by some £3 billion by 2035. Got right, an ambitious free trade agreement could bolster bilateral economic growth and, given India’s regional significance, boost growth and trade with its near neighbours, too.
An agreement that sees the removal of key duties and tariffs is particularly important. As the hon. Member for Glasgow East stressed, exports of Scottish whisky and of cars, which face duties of 150% and 125% respectively, are important.
Navendu Mishra
The Times of London reports today that in 2020, UK companies exported pesticides containing 12,240 tonnes of seven different chemicals that are banned in the UK. Does the shadow Minister agree not only that that is morally wrong, but that it highlights the Government’s double standards on exports?
Gareth Thomas
My hon. Friend makes an important point. That is why we need to ensure that there is no weakening of standards as Ministers, perhaps desperate to make up for the shortfalls in the trade and co-operation agreement with the EU, seek to rush to agree trade deals with other countries.
Ministers ought to be able to make fast progress on Scottish whisky tariffs. The Government of India are keen to tackle smuggling, counterfeiting and the loss of tax revenue, so the UK Government are pushing at an open door regarding Scotch whisky tariffs. The financial sector is emerging as a vibrant and dynamic area of growth in the Indian economy, but India ranks only 30th as an export destination for UK financial services. Figures suggest that Britain exported about £3.8 billion of services to India, with financial services making up less than 10% of that total.
An ambitious agreement on services could support and complement India’s economic development. Indeed, given the UK’s strong comparative advantage in high-value services such as digital finance, a deal that does not support real growth in services exports would be very disappointing. Again, on tech, the UK and India are among the world’s leaders in the development of new technologies. An FTA could help to develop business co-operation in advanced research and manufacturing capacity, in green energy capacity in particular, as well as in artificial intelligence.
For many small businesses, improving customs arrangements to reduce bureaucratic delays and red tape is key. An FTA should include reaffirming commitments to implement the WTO’s trade facilitation agreement, to ensure that there are commitments on the timely release of goods and express shipments, and a mutual recognition of authorised economic operator schemes. On the point of mutual recognition, a comprehensive and ambitious FTA, of the type promised by the Prime Minister, should also include progress on the mutual recognition of professional qualifications and more robust regulatory dialogues.
Trade agreements are not a zero-sum game; there are trade-offs. One reason why better scrutiny of trade deals is needed is to ensure that there is proper debate about those trade-offs and the context of trade deals being done—a point underlined by the hon. Member for Strangford. One obvious issue in that regard concerns visas. The Secretary of State confirmed that nothing is off the table, and a multiplicity of sources confirm India’s continuing interest, and indeed priority, in a substantial easing of visa restrictions into the UK.
Martin Docherty-Hughes
While the UK was a member of the European Union, it was the fly in the ointment of a trade deal with the Republic of India, over two specific issues: whisky tariffs, and the fact that the UK Government did not want a more liberal visa position. Is the reality that now they cannot get cheap labour from Europe, they are looking for even cheaper labour from India?
Gareth Thomas
The hon. Gentleman asks an important question. My hon. Friend the Member for Ealing, Southall underlined the concern we heard from many sources about the more illiberal regime on visas that was introduced by the previous Prime Minister. It is worth asking the Minister if he plans to allow, as under the Australia deal, a significant increase in access to the UK for Indian nationals. What will Britain’s ask be in return, regarding easier movement between the UK and India for UK professionals?
What is the Minister planning for ceramics? That is a key industry, which is hugely important in many specific parts of the UK, such as that of my right hon. Friend the Member for Walsall South, and which is facing ever-growing competition from India. To what extent is the Minister factoring into the negotiations the needs of the ceramics industry?
One of the criteria that the Opposition will use to judge the Secretary of State’s negotiating skills is the extent to which the deal boosts development, improves equality of opportunity, and tackles poverty. Just as we believe that every community in the UK should benefit from the trade deals that Britain signs, every community in India should benefit from a UK-India free trade agreement. That is why we want to see chapters on labour and human rights—important points underlined in interventions from the hon. Members for Strangford and for West Dunbartonshire. We welcome the opening of negotiations, but we will monitor their progress very carefully.
The Parliamentary Under-Secretary of State for International Trade (Mr Ranil Jayawardena)
It is a pleasure to serve under your chairmanship, Mr Davies. I thank my hon. Friend the Member for Harrow East (Bob Blackman) for raising this important topic and for sharing his passionate belief in the importance of closer ties between Britain and India. I also thank Members from across the House for their broad support for the notion of a trade agreement with India. Although we do not have much time left, I shall do what I can to cover as much as possible.
The Government fundamentally believe in the power of free trade and free markets as unrivalled forces for good in the world, which is why we are pulling out all the stops to champion this great cause globally. We are using free trade around the world to forge new bonds of prosperity with nations worldwide, unlocking fresh growth for businesses of all kinds and sizes based across our United Kingdom. We are positioning Britain at the heart of a rapidly changing global trading system, in which the greatest opportunities lie in emerging markets and the fast-growing economies of the east, and the free trade deals that we are signing with our partners are key to that endeavour.
As has been mentioned, we have already signed deals with 70 countries plus the EU, covering trade worth £772 billion in 2020, and there is more to come. We have already gone above and beyond existing EU agreements with some of the world’s most advanced economies, such as Japan, and we have secured new deals with Australia and New Zealand, but we are just getting started.
To witness the fantastic potential of the global Britain that we are building, we need look no further than the deal that we are discussing today: the free trade agreement that we are negotiating with India. This deal promises to be a game changer for our economic partnership with the world’s largest democracy, opening the door for British businesses to a vast and fast-diversifying market of almost 1.4 billion people—larger than the population of the EU and US combined. The deal is bringing us closer to an economic superpower that, despite covid, was worth more than £2 trillion in 2020 and is on course to become the world’s third largest domestic market by 2050. As the world’s spending power shifts eastward, giving global Britain a greater stake in the Indo-Pacific is crucial, because it is a part of the world that represents over 40% of global GDP and contains the growth of tomorrow.
As has already been said, Britain and India share a trade partnership that was worth almost £24 billion in 2019—energised, as my hon. Friend the Member for Harrow East says, by the living bridge of people and ideas that flow between our nations. We already share close business ties, including nearly half a million jobs across our economies, according to the Confederation of British Industry. Our financial markets are interconnected, with 35 Indian companies listed on the London stock exchange, and our firms partner one another in driving change across a range of fields, from finance to manufacturing, and from tech to transport.
There are innovative businesses such as the Indian firm Intas Pharmaceuticals, which has its headquarters in the constituency of the hon. Member for Harrow West (Gareth Thomas) and near that of my hon. Friend the Member for Harrow East. There are many other such businesses across London, but we know that our nations could and should be doing far more together. That is why we want to strengthen the partnership with India further and faster, building on the bedrock of shared values, common law, institutions and, as the hon. Member for Ealing, Southall (Mr Sharma) said, cricket.
Martin Docherty-Hughes
What do shared values mean, when a UK citizen born in this country—a full UK citizen with a full UK passport—can be arbitrarily detained by an ally?
Mr Jayawardena
I will address the points made by the hon. Gentleman and, indeed, by the hon. Member for Strangford (Jim Shannon) in a moment, but I want to make some progress on trade, which we are also here to discuss.
As part of the road map signed by both Prime Ministers last year, we have set the ambition of doubling our trade with India by 2030, as has been said. That provides a clear framework for our bilateral relationship in future. As part of the road map, we committed to deepening the economic relationship through an enhanced trade partnership, an ETP.
I was delighted to play a role in driving forward that partnership, which is already helping to increase opportunities for British businesses in India by tackling market access barriers, for example, allowing our apples to be imported into India once again—some say, for the first time in 50 years. The partnership has also secured improved access for British medical devices, as noted by Members; committed us to agreeing on mutual recognition of educational qualifications, as requested by the Labour Front Bencher, the hon. Member for Harrow West; and is exploring how we can increase our trade and co-operation in legal services, as raised by the SNP Front Bencher, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry).
Major restrictions such as high tariffs, however, still hold us back, so a free trade deal between Britain and India holds the key to unlocking our enormous untapped trading potential. An ambitious deal could bring huge economic benefits, boosting Britain’s GDP by up to £6 billion by 2035 and delivering a triple bonus of higher wages, lower prices and greater choice for British consumers. We could slash taxes on British exports, such as whisky, whether from Scotland, Northern Ireland, Wales or even England—
Mr Jayawardena
I will make some progress. Whisky and cars, from across our nation, face import duties of 150% and 125%, respectively, in the Indian market. A trade deal could give British businesses a first-mover advantage over American and European firms in India, positioning our exporters—as said by my hon. Friend the Member for Wyre Forest (Mark Garnier)—at the front of the queue to meet the expanding demand for world-class goods and services from India’s tens of millions of middle-class consumers.
Increasing trade-led growth could benefit Scotland by up to £220 million, Wales by more than £120 million and Northern Ireland by £70 million, while delivering tens of millions pounds-worth of growth across every English county, including counties in the west midlands, where a deal could bring a boost of up to £300 million, providing fresh opportunities for firms that do business with India, such as Aceleron Energy in Worcestershire and Fortress Security in Wolverhampton. Opening the door to further trade-led growth for firms in the south-east could see a boost to their collective economy of about £430 million in the long run. Such companies include manufacturer He-Man Dual Controls based in Hampshire—not in my constituency—and Larchfield Aerospace in Kent.
The trade deal has the potential to benefit SMEs, which account for 80% of British trade in goods to India in 2020. Smaller firms are disproportionately hindered by costly trade barriers and, as a result, they stand to benefit the most from a deal that cuts red tape and reduces administrative burdens.
Any agreement will be a future-facing deal, expanding the business we do with India in cutting-edge sectors that are shaping the global economy, pushing the boundaries of technological change from fintech to clean tech, automation and AI. As the world’s second-largest services exporter, Britain is perfectly placed to support Indian growth in those fields, taking our partnership in the industries to the next level.
None of that will alter this Government’s commitment to uphold British values. I said that I would address this point: we condemn any instances of discrimination of religion or belief, regardless of the country or faith involved. Where we have concerns, we raise them directly with the Government of a particular country, including the Government of India, at official and ministerial levels. That continues to be so in the case referred to by the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), which the Foreign Office has raised more than 70 times—
Mr Jayawardena
I am afraid I do not have time today, but I am sure we can continue the discussion.
This deal will help to define the future for the global Britain that we are building. It will lay the foundation of our trade relationship with one of our strongest and most important global partners. It will place the world’s oldest democracy and the world’s biggest one side-by-side as we champion a world view that puts people first. It will shape how a modern, ambitious and truly global Britain is using the irresistible power of free trade to tear down barriers to growth.
Motion lapsed (Standing Order No. 10(6)).