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Lord Goldsmith
To move that the Grand Committee takes note of the Comprehensive Economic and Trade Agreement between the United Kingdom and the Republic of India, laid before the House on 21 January.
Relevant document: Special attention drawn by the 14th Report from the International Agreements Committee.
Lord Goldsmith (Lab)
My Lords, I am delighted to lead this debate on the report from the International Agreements Committee, which I was privileged to chair until late January of this year—a position I then passed to the noble Lord, Lord Johnson of Lainston, who I am delighted will be speaking today also.
The UK’s free trade agreement with India was signed in July 2025. I want to highlight at the outset that concluding any free trade agreement with India is a significant achievement. India sits behind high-tariff and non-tariff barriers to trade and is a formidable negotiating partner with a history of protectionism. In view of these challenges, the committee’s view was that the Government are to be congratulated on reaching a deal. That said, the FTA was a compromise and is not without its shortcomings, which I will come to. Under the enhanced procedures for scrutiny of free trade agreements agreed between the committee and—at the time—Her Majesty’s Government, the FTA was published on signature well ahead of being formally laid in Parliament on 21 January 2026. This allowed the International Agreements Committee to scrutinise the FTA in detail, with an inquiry running from September 2025 until January 2026.
I pay tribute to the noble Lord, Lord Grimstone, the then Minister, and the noble Baroness, Lady Hayter, then chair of the committee, who negotiated these important agreements. If we could extend what came to be called the Grimstone commitment to other treaties, at least some of the concerns that we expressed in our report on treaty scrutiny, which will be debated on 16 March, could have been avoided. I also pay tribute to the members of the committee past and present, whose experience and knowledge brought about an excellent final report. I am delighted that a number of members of the committee will be speaking today. I am going to pick out a few points in my remarks from the paper, but I respectfully draw attention to the whole report. There is a lot there. I therefore also thank our staff: Rhiannon Williams, Dom Walsh, Sophie Andrews-McCarroll, Stephanie James, Cathy Adams and Aneela Mahmood, as well as the committee’s specialist adviser, Professor Sarah Hall. I am also grateful to our witnesses, whose evidence made a vital contribution to the report, and to the Government for their constructive engagement with our inquiry.
As I say, the negotiations on the agreement were over a long period between 2022 and 2025, against what can only be described as a challenging geopolitical backdrop. During that period, we saw a rise in protectionism, growing global instability, mounting uncertainty for international commerce, fragile supply chains, tensions between the US and China and the continuing Russian invasion of Ukraine. Trade is no longer simply an economic exercise but increasingly an instrument of geopolitical strategy, as is evidenced, for example, by the recent United States Supreme Court decision on the legality of President Trump’s general tariffs.
In that context, the FTA with India is about not merely securing new market access but providing stability for businesses, diversifying supply chains and establishing a platform for sustaining strategic co-operation with an important partner. We also welcomed in the report the fact that the agreement reached is compliant with World Trade Organization rules, especially in light of the current challenges to the rules-based international order.
I turn to the first of the topics covered: the trade in goods. Here, it is clear that the FTA secures improved access for United Kingdom manufacturers. For exporters, it delivers tariff reductions on 90% of Indian tariff lines, while the UK will eliminate tariffs on 99% of Indian imports. UK consumers can also expect to benefit from improved choice and lower prices. That said, there are shortcomings here, chiefly the pace at which benefits for UK goods exporters will be realised. Under the staging and quota arrangements, India will reduce its barriers to UK exports only gradually, over a period of some 15 years. Meanwhile, some Indian exporters will enjoy immediate access to the UK market. This imbalance reflects the relative openness and otherwise of our two economies, but it makes the FTA a long-term strategic investment in the UK, rather than a quick win. I want to come back to that point later in my remarks.
Some UK industries, notably dairy, may face increased competition in responding to new opportunities for access to India’s markets. We therefore ask the Government to set out what measures they will take to support sectors adversely affected. They should monitor carefully the risks of trade displacements, both of Indian goods diverted from the US as a result of President Trump’s tariffs, but also of exports from developing countries, especially Pakistan and Bangladesh, which could be displaced by increased Indian access to the UK. We highlight in the report the potential risk posed by India’s use of non-tariff barriers, particularly the so-called quality control orders. These could undermine the agreement’s objectives and exacerbate market asymmetries. We therefore conclude that the Government must not hesitate to engage with India directly where barriers remain.
I turn next to services and investment, because another shortcoming there is what was omitted from the agreement. In order to conclude the deal—and we understand this—several important UK priorities were ultimately left out. There is no bilateral investment treaty. There are no arrangements on legal services, a long-standing and unresolved issue between the legal professions in both countries—I draw attention to my declaration of interest in the report and elsewhere. There is no new market access in financial services and no finalised framework for mutual recognition of professional qualifications. These represent missed opportunities and highlight that the agreement is heavily weighted towards goods. There is considerable scope for further work with India on services and investment facilitation and we urge the Government to pursue this. They should treat the agreement as a start and not an end.
I turn to the movement of people. We should be clear that the agreement’s provisions relate to facilitating the temporary movement of professionals, not UK-India migration more broadly. We heard that the provisions create stability for Indian business visitors to the UK but are unlikely to impact UK-India migration patterns significantly.
The agreement was accompanied by a side letter stating that the UK would negotiate a so-called double contributions convention—or DCC—an agreement under which temporary workers would make social security contributions in only one country, rather than in both, for a period of up to three years. We called on the Government to conduct an impact assessment on the consequences of exempting certain temporary Indian workers from UK national insurance contributions. Since then, the DCC has been agreed and laid before the House. That was noted by the International Agreements Committee last week. I therefore draw the House’s attention to a letter sent on 25 February by my successor, the noble Lord, Lord Johnson, to the noble Lord, Lord Stockwood, the Minister, which reiterates the committee’s recommendations for an impact assessment.
Our inquiry and the preparation for our report took place before the conclusion of the EU-India FTA negotiations, so we were unable to analyse the implications of this in any detail in our report. The two agreements appear similar, in certain respects, taking into account the scale of our respective economies. It appears, for example, that India has committed to a similar level of tariff liberalisation for EU cars as it did for the UK, albeit for a much larger annual quota. Overall, the UK may retain an element of first-mover advantage, as the EU-India FTA will not enter into force for some time, but it is unclear how competitive UK products will remain in India, in the long run, as it opens up its market.
Given the important outstanding areas and the point that I have just made, it is vital that the agreement is treated as a living instrument, not a static one. There is clear and mutual benefit in deepening the UK-India relationship beyond the free trade agreement. The Government should make full use of existing dialogue mechanisms and networks to address concrete issues and to build broader co-operation. Given India’s size and significance, and the potential of our bilateral relationship, we believe this should be a high priority.
Moreover, as one witness reminded us, an FTA is not a panacea. The benefits can be realised only if businesses are able to use the agreement effectively. We therefore recommend that the Government introduce a package of measures to help businesses, especially small and medium-sized enterprises, to take full advantage of the opportunities. This should include clear, accessible, sector-specific guidance and an explanation of the enhanced support that will be available through the department, the high commission and its regional offices in India.
Overall, this agreement is a noteworthy achievement. The task now is to make the most of it by addressing its shortcomings, by helping business to use it and by working with India to remove the remaining barriers to trade. There is real mutual benefit in strengthening this relationship further, and we urge the Government to give that objective the priority that it deserves. We also look forward to the Government’s full response to our report in due course and to what the Minister has to say this afternoon. I beg to move.
Lord Howell of Guildford (Con)
My Lords, as a member of the committee that produced this report, I congratulate our former chairman, who has just spoken, for guiding us through an extremely complex and quite prolonged report on a wide variety of subjects. We think that it is about trade, but the truth is that trade is security, security is confidence, confidence is stability, and stability is investment, expansion and peace. Therefore, this is inevitably just a visible part of a much larger subject area. It is an absolutely excellent report. Of course, I would say that anyway but, having spent 60 years in this Palace—40 of them on committees and the remaining 20 in or out of the Government— I think that this is really one of the best reports that I have ever read. I am not exaggerating that nor just saying it because it is a nice thing to say.
I want to concentrate a little more than the chairman did on, not so much the detail, but the proposition—found in paragraph 223 on page 48—that the whole agreement has to be understood within the wider context of the UK’s evolving relationship with India. This is really the point. We are talking here not just about another country and another FTA, but a relationship with an enormous country, which goes back hundreds of years. It is, in population, the largest of all and is obviously set for great things as it grows increasingly fast and increasingly finds itself at the centre of the world, certainly in its foreign policy as it seeks a balance between the autocracies and the liberal capitalist world, and to do so with some considerable skill—although there are one or two areas of criticism as well.
I think it was Governor Carney, now Mr Carney the Prime Minister of Canada, who was talking the other day about the knowledge and potential power of the middle-power nations. It is not all a game for the big boys, for China, America or even Russia. Mr Trump loves to say, “We’re holding all the cards; you don’t have any cards”, but it is not true. If the middle-ranking powers in influence work together increasingly, as we are trying to work with India, there will be a number of very valuable cards that we can and should play, contrary to dealing with Mr Putin or Xi Jinping. These are things that we should not just give up, saying “They are big; they are going to decide”—they are not. This is not necessarily the age of great powers that the President of the United States thinks it is. For a start, the Commonwealth is 56 nations and 2.6 billion people, of whom more than half are Indians inside the great Indian nation. There are many other areas of technology where they are beginning to take the same kind of lead as we now associate with China.
If I have any regrets about shortcomings, to add to the points made by our chair, I would have liked to see, first, a little more about the role of the Commonwealth in the future pattern of things, which I think will be much greater than people realise or understand, partly because, in the digital age, you cannot overcentralise to the degree that some organisations are trying to do or have tried to do and failed. Secondly, there are specific issues—dare I even mention the controversial Chagos Islands and the whole north Indian Ocean—where the Commonwealth, and India in particular, might have had a much bigger role to play if they had been consulted and things had been discussed with them in the way that we discussed this FTA with them.
Sadly, as the chairman mentioned, when it comes to services, not much is said. This is a huge omission because services come into every goods package as well. We have been through a curious phase, first, with the statisticians of the world not recognising services at all; then bundling them in with goods; then taking them out again; and now we are through to a fourth phase where everything is riddled with, filled with, loaded with services. You cannot even export a bunch of bananas without a large degree of the service element as well. There should therefore be a little more understanding that not only do services come into absolutely everything—all trade of every kind—but they are mixed with goods, inevitably. Of course, there is also the omission of legal services. To some extent, these things are dealt with in the other agreement that HMG made with India in July 2025, which we now call, rather grandly, a comprehensive strategic partnership. That deals with strictly non-trade issues, particularly cultural issues, which are extremely important.
We should have said a little more about climate and the desire to get emissions down. If one is looking at the source of ever-rising emissions, it is not this country, nor many countries, but India certainly is one of them. What India needs, with about 1,000 coal-fired stations, is the low-cost technology for carbon capture and storage. We are rather good at that, and we could have perhaps spent more money and effort on that, if we really want emissions down, rather than spending it on rather more splendid things that sound good but do not contribute at all to the world’s reduction of emissions.
I would like to have seen a lot more on small and medium-sized businesses, which the chairman mentioned. The other day I think I heard a Minister—I hope I will not be pressed for a name or any detail—respond to the question of what proportion of our businesses are SMEs by saying, “About 70%”. That is completely wrong. According to official statistics, 99.18% of businesses in this nation employ fewer than 50 people. Businesses employing 50 to 249 people make up 0.67%, and large businesses 0.15%. In other words, more than ever, modern economies are overwhelmingly comprised of small enterprises, and it is their interests and concerns that should be at the centre of our evolving relationship with India.
Finally, I remind noble Lords that India is the biggest democracy. It is using AI and other technologies to, among other things, speak simultaneously in 30 languages to its vast electorate. The India of the future is a glittering prospect and one that deserves both respect and friendship. Friendship has to be worked at, night and day, and we have to work a lot harder than we have done in the past. The report is a step on the way and I am very honoured to have been involved in its production.
Lord Hannay of Chiswick (CB)
My Lords, it is a pleasure to follow and applaud the excellent introductory speech of the noble and learned Lord, Lord Goldsmith, the former chair of the International Agreements Committee, on which I have the honour to serve. As we see him rotate off the chairmanship, I wish to say—I hope I am not going too far and taking in vain the name of others on the committee—how grateful we are for the skill and sheer hard work that he has devoted to the chairmanship.
The International Agreements Committee is relatively new and unfortunately not matched by a similar committee in the other place. Short though its existence has been, it has been required to handle, under the CRaG procedures, some quite significant agreements, of which this free trade agreement with India is certainly one. In every case, the House has accepted the advice that the committee has given, as it will, I hope, at the end of this debate.
The free trade agreement with India is significant for at least three reasons. First, India is the most populous country in the world. It is rapidly growing, with a huge internal market, and is becoming less fragmented as a result of its Government’s fiscal policies. Secondly, India has a long tradition of trade protectionism but is slowly moving away from that approach towards our preference for freer and fairer trade, with agreements with ourselves, the European Union and the United States—although the details of the last remain something of a mystery. Thirdly, we have been able to negotiate a free trade agreement that we believe to be fully consistent with the provisions of the GATT/WTO, the world’s rules-based trade order, which is taking some hard knocks from President Trump’s regrettable lurch into unilateral tariff impositions.
Is the agreement perfect? Certainly not, as the noble and learned Lord, Lord Goldsmith, said. It lacks substantial and effective provisions for trade in services, particularly legal and financial services. Services make up 80% of our economy, hence the need to treat this agreement not as an end point but as a living instrument that can be improved to mutual benefit over time. I hope that when he replies to this debate the Minister will confirm that that is how the Government will treat it.
Does the agreement risk flooding the UK with migrant workers? It does not do that, since the provisions of the agreement are largely limited to intra-company transfers similar to those that we already have with many other countries, to our and their mutual benefit.
Will the gains to the British economy, which are admittedly not enormous and in some cases not immediate, fall into our laps? They will not. They will materialise only if the Government give advice and support, in particular to small and medium-sized enterprises, to penetrate what is a complex and often difficult market. That will require a systematic effort by the Government’s export promotion functions and by the offices of our high commission in India, including its regional branches. Can the Minister say what we are doing to mount that effort?
Straying now a little on to two points that are a bit wide of the precise subject of this debate, I would like to ask whether we should not be using our very welcome membership of the CPTPP to bring both India and the European Union into the ranks of its members. It is often said that CPTPP members do not take positions on other countries’ membership, and I understand very well that the figure of China and Taiwan lurks in the background of that view, but it is slightly absurd. It must be the only membership organisation that I have ever come across where the members do not take a view about future members. I would like to hear what the Government have to say about the prospect of both the EU and India joining. I point out that, if India were to join the CPTPP, that would go quite a long way towards remedying the problem over the lack of provisions on services in this agreement.
Straying a little further again, I would like to point out that the Government’s trade policy and free trade agreements seem not to have reached Latin America. Yet the European Union has just included a very ambitious and important agreement with Mercosur, which is likely to be beneficial to both sides. I believe that a similar agreement could be very beneficial to us. I would like to hear from the Minister whether that is somewhere on the horizon of our future trade policy.
I do not want to close without a wider glance at the inadequacies of the CRaG process, although we will have an opportunity to debate them again on 16 March. The 21 working-days limit for the committee to take evidence and produce a report and for it to be debated is, frankly, absurd. It is absurdly short. In the present case, problems were avoided thanks to the Business Department having co-operated in briefing the committee about the content of the agreement before the CRaG procedure was triggered, but that does not always happen. Sometimes, we get a situation where, I am ashamed to say, as happened on one occasion, we have had to produce a report without taking any evidence at all because there was no time or opportunity to do so. But that is for 16 March. I would like there to be an agreement soon between us and the Government that, as a general rule, the Government will grant one additional 21-day period unless there is an overriding national interest not to do so. I hope that the Minister can reflect on that and discuss it with his colleagues before we meet on 16 March.
Baroness Gill (Lab)
My Lords, it is with great pleasure that I take part in this debate. I welcome this landmark comprehensive trade agreement between the United Kingdom and India, and I thank the International Agreements Committee for its work under the leadership of the noble and learned Lord, Lord Goldsmith, on this excellent report.
In a world of shifting strategy and strategic balances, heightened geopolitical uncertainty and fragile supply chains, which are sorely under strain, with rising protectionism and greater polarisation between East and West, this agreement sends out an important signal. It demonstrates not only that this Government are committed to being outward and forward looking but that they are serious about deepening relationships with growing economies and creating partnerships with like-minded democracies.
As we have already heard, India is the fastest-growing major economy globally, but it is not simply a large market. It is a powerhouse in the region and a technology power—one that is likely to be an engine of growth in the decades ahead. Strengthening our relationship is both commercially sensible and strategically wise. The economic rationale alone is compelling. Bilateral trade between the UK and India now exceeds £40 billion annually, spanning goods and services. Therefore, our ongoing dialogue must be dynamic—a living platform, as we have already heard, that evolves as India’s global economic footprint expands.
For Britain’s communities, in particular among the British-Indian diaspora—I speak on behalf of those in Birmingham, in Leicester, in London and elsewhere in the country—real benefits will be felt in everyday life. Expanded trade promises lower prices, greater consumer choice and more resilient supply chains for essential goods. I believe that the benefits will be tangible and wide-ranging for us both. For our small and medium-sized enterprises, which were referred to earlier and are the backbone of the British economy, this will mean tariff reductions and simplified customs procedures. Access to Indian public procurement will open up opportunities in a market of 1.5 billion people.
Having said that, I agree with your Lordships that we must recognise that SMEs will not be able to utilise these opportunities without extensive support, including clear guidance, understanding procedures and targeted facilitation to transform potential into real trade and innovative outcomes. Many of us have worked over there and have a deep understanding of the different business environment, appreciating the complex relationship between trade bodies and decision-makers there. The onus must be on our trade bodies, especially the regional ones, to step up and support our SME organisations. That will lead to the maximisation of the benefits for businesses and households.
My old friend, Nobel laureate Amartya Sen, observed that development requires the expansion of human freedom and capabilities. In this context, trade is not merely a financial exercise. It is about enabling people, ideas and knowledge to circulate freely. The modern economy rewards ideas as much as goods. Artificial intelligence, digital services and advanced manufacturing are reshaping global markets and value chains. This agreement has the potential to strengthen the living bridge between the two much further. Diaspora entrepreneurs, professionals and families who span the UK and India are not merely observers of policies. They need to be active participants in sustaining long-term economic and cultural growth.
I believe that this has to be the beginning of a broader road map—one that deepens co-operation on advanced technologies, green finance, skills recognition and innovations that will lead to SMEs participating fully. If we want to ensure that this agreement is truly forward looking, it must create structured pathways for joint research, co-innovation and regulatory dialogue sooner rather than later.
I say this because of India’s subsequent agreements with the European Union, which I championed for many decades while I was in the European Parliament. They had years to work out that relationship; we had a very short window to work on this agreement. India is demonstrating that it is ready to expand its trade agreement and look at other areas. A couple of days ago, India and Canada struck a range of accords, including a 10-year nuclear energy deal and deals on technology, critical minerals, space, defence and education. We need to follow this.
I encourage the Government to contemplate how this agreement could evolve over the coming decade. For example, there has been considerable debate in this House about AI. Successive offshoots of this agreement could promote a more structured collaboration on emerging technologies, especially AI, in a way that supports ethical standards, fosters SME innovation and deepens people-to-people exchanges across universities and industry. I ask the Minister what concrete mechanism the Government will put in place to ensure that this agreement becomes a platform for not just trade but shared innovation, professional mobility and AI collaboration, turning this vision into tangible benefits for businesses, communities and the next generation of innovators.
To conclude, I once again congratulate everyone involved in bringing about this CETA. As the noble and learned Lord, Lord Goldsmith, rightly said, it is no mean feat to get this with India. I commend the Government for the speed with which they have built this strong foundation for a durable strategic partnership with India. Our focus and ambition should be that this comprehensive agreement is of lasting value, measured not merely by trade figures but by how it has strengthened ideas, skills and human connections, ensuring that we have jointly created a resilient, strategic and enduring partnership.
Lord Ahmad of Wimbledon (Con)
My Lords, it is a privilege to speak about the CETA signed between the United Kingdom and India. It would be remiss of me not to acknowledge the vital work of the committee and the stewardship and leadership of the noble and learned Lord, Lord Goldsmith. I appeared before it a few times as a Minister and know the thoroughness of his and the committee’s work.
The bringing forward of this agreement demonstrates a real renewed partnership, not merely on commerce but with real conviction about trade flows and shared democratic purpose. The story of the United Kingdom and India is in many respects the story of two great democracies—the oldest and the largest—rediscovering one another in the modern changing world. When the United Kingdom left the European Union, we spoke of forging a truly global Britain, outward looking, confident and anchored in strategic partnerships. Few relationships were more central to that vision than our new partnership with India.
India stands as one of the world’s fastest-growing major economies. By 2030, it is forecast to be the third- largest economy. It is a technology powerhouse and a critical geopolitical actor not just in the Indo-Pacific but globally. Its trajectory is unmistakable. Under the leadership of Prime Minister Narendra Modi, it has pursued economic reform, infrastructure expansion and digital transformation at immense scale. For the United Kingdom, securing a comprehensive trade agreement with India was not optional, but essential.
During my tenure as the United Kingdom’s Minister of State at the FCO and the FCDO, I was honoured to serve as the Minister responsible for our relationship with India. I had the privilege of working with many Indian counterparts, and I pay tribute to Foreign Minister Dr Jaishankar, many business leaders and stakeholders across our two countries who deepened this relationship. I witnessed first-hand the enormous opportunity and the intricate sensitivities that shape negotiations of this magnitude. The CETA, although ambitious in scope, aimed to reduce tariffs, ease market access, strengthen intellectual property protections, facilitate services trade and create a framework for investment. For the UK, it opened doors for our financial services. More work was needed but, nevertheless, it made progress on legal and professional services, advanced manufacturing, life sciences and education. For India, the agreement offered preferential access to a high-value market, collaboration in technology and a platform to scale its export industries.
One of the most significant elements of the agreement was tariff reduction. India historically maintains higher average tariffs than many advanced economies. Securing phased reductions in each sector, be it Scotch whisky or medical devices, was a tangible achievement. Equally important was expanding access for UK services, an area where Britain has a clear competitive advantage. Financial services, fintech innovation and regulatory dialogue were central pillars of our approach. Mobility is also key. Facilitating easier movement was a modern character of trade, not simply goods crossing borders but talent and innovation. The UK-India migration and mobility partnership, signed in 2021 by the Conservative Government in which I served, complemented the economic framework for this sustainable trade growth.
Yet any serious reflection, as we have heard from the noble and learned Lord, Lord Goldsmith, requires honesty. There are areas where the agreement could have been strengthened further in the United Kingdom’s favour. First, deeper liberalisation in legal and financial services would provide greater certainty for British firms operating in India. Secondly, stronger commitments on intellectual property enforcement would have further protected British innovation. Thirdly, public procurement access represented an area where greater mutual benefit would have benefited both India and the UK. Ensuring transparent and open bidding processes for foreign firms also continues to be a vital objective. Fourthly, tariff elimination timelines in certain sectors, notably automotive and spirits, might have been accelerated further. Phased reductions were pragmatic, but swift implementation would have delivered earlier gains for UK exporters. Finally, while mobility provisions were meaningful, achieving broader recognition of professional qualifications could have strengthened the agreement’s long-term impact.
However, I accept that trade agreements are not drafted and crafted in a vacuum. They are forged in the backdrop of political realities, domestic sensitivities and strategic calculations on both sides. India negotiates trade agreements carefully—cautiously at times. It weighs sovereignty and development priorities carefully. Understanding that perspective was essential for the United Kingdom to make progress. Between 2019 and 2024, my role was not simply to advocate for British interests but to build trust, engaging with Indian Ministers, not just in Delhi but across states. With industry leaders I worked to elevate the trade dialogue to a strategic level and was delighted in this venture for several years to be accompanied through sharing a room and on the world stage with my noble friend Lord Johnson, whom I look forward to hearing from shortly. We established structured dialogues, enhanced ministerial-level engagement and deepened parliamentary links. Crucially, we sought to frame the agreement as mutually—and that is crucial—transformative. For Britain, it was about growth, jobs and global reach. For India also, it was about partnership with a trusted friend and democracy, offering world-class services and innovation. By aligning our collective strategic narratives, we created the political space for compromise and agreement.
The CETA must also be viewed in the wider geopolitical context. At a time of immense global uncertainty, supply chain fragility—as we heard from the noble Baroness—and intensifying strategic competition, strengthening ties between two major democracies sends a powerful message. Economic interdependence can reinforce strategic alignment. Trade builds resilience.
Looking ahead, as we have heard from the noble and learned Lord, Lord Goldsmith, and the noble Baroness, Lady Gill, the agreement should be seen not as an end point but as a foundation. Trade deals are living instruments; they require continuous review. There is scope to deepen this co-operation through digital trade co-operation, green technology partnerships and collaboration in critical minerals, advanced manufacturing and, indeed, AI. The CETA between the United Kingdom and India represents a landmark agreement in modern bilateral relations. It reflects ambition, pragmatism and shared democratic confidence. It delivers tangible economic benefits while strengthening strategic ties.
For my part, serving as Minister of State with responsibility for India was a great honour of my service, helping to shape a partnership between two nations—one nation of my parents’ birth with a nation of my own, bound by history yet oriented firmly towards the future. That is the work of lasting consequence. The United Kingdom and India are not simply trading partners; we are democratic allies, innovation collaborators and global stakeholders. This agreement is not merely about commerce but shared confidence: confidence in our open markets, confidence in our shared values and confidence in a future built together.
Lord Anderson of Swansea (Lab)
My Lords, it is good to follow the noble Lord, Lord Ahmad, who was a highly respected and highly successful Minister; I salute him for that. I congratulate my noble and learned friend Lord Goldsmith, the former chairman of the relevant committee. I also thank the secretariat for what was a superlative first draft—in fact, the best that I have personally seen.
The context is clear: India has been highly protectionist from independence in 1947. On the OECD scale of high trade barriers, India is 43rd out of 51. Yet there have been a recent series of trade deals that show a historic shift on the part of India. I will not claim that the dam has burst, but there are very major cracks in that dam. In 2022, India had deals with the UAE and Australia, in 2024 with EFTA, in 2025 with the UK and New Zealand and, in January this year, with the EU. It will also have a deal with Canada by the end of the year. Why? The Indian Government and Premier Modi wish to integrate into the world economy. That change has also been accelerated by the US tariffs and the unpredictability of President Trump’s Administration.
There have been positive advances in areas such as procurement under this deal, but there are still protectionist elements, such as in food grains and other areas. There are also missed opportunities, as my noble and learned friend Lord Goldsmith has said, in terms of the mutual recognition of professional qualifications and particularly in legal services. I recall our meeting with the chair of the Bar Council and the failed opportunity for that “noble profession”, as they call it in India, the legal profession.
Briefly, I will raise two questions. First, are the benefits mutual? Secondly, would the UK have had a better deal if it were not for Brexit and if we had remained within the European Union?
Many of the Indian concessions are phased over a number of years, whereas those for the UK are bunched at the beginning of the process, so it is clear that India will gain most in the short term. However, we have gained access to a dynamic growing market. Indeed, we should have done far better because of the very skilled diaspora in our own country; we start with a major benefit in that sense. In effect, both sides are winners, even if there are differences in the phasing between the two.
Would we have done better if we were within the European Union, given the EU’s greater clout in negotiation? Of course, the EU now has its own deal, after relations between the EU and India on an FTA had been becalmed for decades. Could we have done better? It is difficult to compare the two deals—those with the UK and with the EU—and it is possible to argue that the UK has different priorities from members of the EU, and that the priorities that are reflected in the current deal might not have been reflected in quite the same way had we remained members. I hope the Government are now comparing our deal to that with the EU to see to what extent it builds on our own.
I noticed with interest two articles in the Financial Times. The first, by Mr Marshall—a Brexiteer—on 19 December of last year, argued that the real problem is the lack of implementation of Brexit. The second was a reply by Professor El-Agraa on 16 January, who argued that deals such as this offer only a marginal contribution to the UK economy and that we would have obtained a better deal had we remained within the EU. The jury is still out. As Mrs Malaprop said, comparisons are odorous.
Prima facie, there are areas where the EU has a better deal. I think, for example, of spirits. Tariffs on spirits in the deal with the EU will be concluded far more quickly than for Scotch whisky, but the problem here is surely the question of volume. Scotch whisky is the drink of choice for Indians, so it is no surprise that there is a longer timescale for tariffs on Scotch whisky in our deal.
There are other examples, such as lamb and mutton, on which our farmers lost out substantially in the Australia and New Zealand deals—indeed, imports from Australia and New Zealand have soared, to the detriment of our own farmers, as a result of the deals reached with them. So the Government clearly need to undertake to monitor these deals very carefully.
Think also, for example, of the deal on social security payments: monitoring is again very important, because of the effect on His Majesty’s Treasury. I hope the Government undertake to carry out regular monitoring exercises in this respect.
There is a clear prospect of progress on bilateral investment deals for both us and the EU. I hope that, in time, the UK and Indian legal professions will bilaterally negotiate acceptable deals.
I have two final observations. First, there are perhaps only two cheers for the deal generally, but it is a living instrument and, with good will, the joint committees will ensure a dynamic implementation. Secondly, in her speech at the LSE on 11 February, the Chancellor made an interesting comment and put the deal in perspective. She hailed bilateral deals such as this one but stated that the proposed deal with the EU is the big one because it covers 47% of our trade; that is the big one, but these are indeed important bilateral deals.
Lord Johnson of Lainston (Con)
My Lords, it is always a privilege to follow the noble Lord, Lord Anderson, who is a pillar of our committee.
First, I pay tribute to the noble and learned Lord, Lord Goldsmith, and his leadership of the International Agreements Committee. In my view—this is widely agreed, and not simply in this Room—he has been an exemplary chairman on and off over the course of several years. I am honoured and, frankly, slightly humbled, which is not my usual state, to step into his place.
I also pay homage and offer my thanks to the existing members of the committee, who have been so supportive of my new role. I recognise, as so many of us do, the incredible level of expertise, as demonstrated by the words of the noble Lord, Lord Anderson, just now.
I declare my interests in this debate. This is the fact about me that many noble Lords may find surprising—my noble friend and study mate Lord Ahmad of Wimbledon knows this well because I have told him it many times—but I am the first member of my family not to have been born in India since 1880. I am passionate about trade with India. My family’s businesses have invested in India. We had a cotton milling floor in Madurai with 60,000 spindles—it is still, by the way, the largest in the world—which I then continued.
The Deputy Chairman of Committees (Lord Beith) (LD)
My Lords, there is a Division in the Chamber. The Committee will adjourn and return in 10 minutes.
Lord Johnson of Lainston (Con)
My Lords, I was giving a great oration to demonstrate my interests and biases towards India, my passion for that great country, my own heritage and how important I felt it was, in the run-up to the India free trade deal, that we celebrated our joint community and shared roots. I am also a passionate free trader. I believe without equivocation that lower tariffs and the free movement of goods, capital and ideas are what leads to prosperity and happiness. As Libanius said:
“And so He called commerce into being, that all men might be able to have common enjoyment of the fruits of the earth, no matter where produced”.
But my vision of a tariff-free world is not shared by many. We all say that we are for free trade, but there is always a sector that needs protecting or some inconsistent view, held by many of my own colleagues, that we need to produce our own steel, children’s plimsolls or whatever it may be for whatever excellent reason. The fact is that, even if we do not receive reciprocity, so long as the trade is on a level and fair playing field, which I admit it is sometimes not, our consumers benefit and, most importantly, capital can be better allocated to investment rather than consumption. It is the duty of the Government to deliver this.
That is why the India comprehensive economic and trade partnership is so significant. It is significant not just because we have opened up new markets to our goods and services but because, as we have heard from noble Lords, we have made an important dent in the protectionist carapace of the Indian nation. I congratulate India on allowing us to do that—on being dented—and hope that this example and template negotiated by us will serve it well as it opens up its economy to the benefit of its vast and excellent population. We are seeing this with the deal that it has done with the EU and the potential deal with Canada. These are good things; they benefit the world. This agreement is important because it helps drive that change.
As our report states clearly, this deal is very powerful for the UK. We know the headlines, where whisky seems to have grabbed much attention. The high commissioner of India, who generously gave us tea last week, explained that 2 billion bottles of whisky are consumed in India every year, so it is clearly an important market to us. But, frankly, there are other areas of huge significance, as noted in the report. One of the most significant is the ability of our businesses to access the Indian federal procurement sector, which is truly massive. I request that the Government do far more to promote this win and help our companies navigate it before other countries sign up to such opportunities. It is a race we must win. Can the Minister tell us how we are going to do this? I refer him to a question I asked some weeks ago about the number of people the Department for Business and Trade is employing. I would join him in fronting up against the Treasury, which no doubt wants to reduce that number, and suggesting that, in situations like this, we should be increasing it.
This is also a living agreement, with various bodies designed to explore further ways of opening up our markets to each other. This new model is one we originated under the previous Government; the Conservative Government did some things right, and it is unquestionably the most effective way to trade further and make these agreements future proof as our economies evolve. Some noble Lords have mentioned some of these points, but I would be grateful if the Minister could give us some more details here, particularly on areas such as AI and future technologies, as the noble Baroness, Lady Gill, referred to. How will this agreement evolve and adapt?
However, as with all our reports, we note the limitations. The section on services is too light, as has been mentioned. This is often an issue with trade agreements, where people focus, not unreasonably, on agriculture and goods. The reality is that we are a services economy and in areas such as the law—this was mentioned but, with no disrespect to the noble and learned Lord, Lord Goldsmith, I was puzzled —which is regarded in India as a noble profession, we could and should have pushed much further. Will the Minister comment on how we are going to achieve this very important point?
I am also concerned about the lack of details regarding the double contributions convention. I distinctly remember that, when I was in government—by the way, I congratulate my department’s excellent officials on achieving this deal—it was a key sticking point, and we seem to have just rolled over on it without comment. How come there are no real costings of this? There is certainly more benefit to India than to us. Will the Minister say what the real cost will be of the DCC, rather than the overall treaty, which is what the impact assessment is focused on? As has been acknowledged, I have already written to the Minister to request this information.
Finally, the biggest issue with free trade is now less about tariffs and more about non-tariff barriers and local restrictions—often cultural and emotional, sometimes essential, but always prohibitive of freer trade and growing national wealth. India has many of these regulations and, from my experience, it is these barriers that we need to erode more than any others. What plans do the Government have to do this and what timelines can we expect to celebrate?
In summary, I congratulate the IAC on its diligent work on this agreement. The excellent team led by Dom Walsh has written a report that is clear and fair. The Government would do well to bear our comments in mind when developing this arrangement. This is a very good example of why treaty scrutiny should be proper and open. We have genuinely added value to the process, and I hope this adds further weight to our calls around extending the CRaG process to other areas of treaty-making. I express my thanks to the Department for Business and Trade, its Minister and the Minister today for their engagement. As the new chairman of the IAC, I hope we will be deluged with new treaties and free trade agreements. We want more. We want to be kept very busy. We cannot stop here. We must push further and never stop until a tariff-free and barrier-free world is achieved. In my view, this is Britain’s gift to the world.
Lord Frost (Non-Afl)
My Lords, it is a pleasure to follow the noble Lord, Lord Johnson. I could not think of a single remark that I disagreed with, so maybe that should do, but I still have a few things I would like to say. I also pay tribute to the noble and learned Lord, Lord Goldsmith, and his committee, who have produced a thorough and interesting report on an important agreement.
It is a pleasure to speak on this subject because I have been involved in this FTA and its predecessors in various forms for quite some time. When the EU was negotiating back in the 2010s, I was the UK member of the trade policy committee, so I saw some of the preliminary work in that context. Then I moved on to run the Scotch Whisky Association and spent quite a bit of time in India when the EU negotiations were stalled and saw the effect of the stalling on what that industry was able to do. Then, in Downing Street during the Johnson Government, we were able to put a lot of effort into preparing what I think was a useful negotiating mandate and scoping document, which has been followed in most cases—except, I am sorry to say, the EU reset negotiations—setting out a lot of detail, aspiration and clarity about the direction that we were aiming to travel in. The current Government have picked up most of that, underlining its value.
I agree that any trade agreement of this scale and nature is worth having. Obviously, it has imperfections and areas where we would like more to have been done, but it is still a major achievement and one to be seen against the doubts expressed so often in this process. Many said that an agreement with India was impossible and could never be done by the UK or the EU, yet both have done one. That is a tribute to the efforts that have gone into this over the years. It is an important signal of liberalisation more broadly when the multilateral trade system is beginning to stall in various ways. It is also important, as others have said, to treat it as a living agreement.
The gains are significant. As has been touched on, the agreement will make a big difference to exports of spirits and cars, even if the tariff reductions are relatively slow. Procurement has not been touched on yet, but this is one area where the UK agreement is a bit more forward-leaning than the EU one, with a significant procurement chapter. One could wish for more on financial and, notably, legal services, but there are good benefits in other areas, in particular banking, which was an ask for the EU and a significant part of our mandate too.
There will always be problems with an agreement such as this. Rules of origin and bureaucracy in India will be complex, and the state-level apparatus in India is a major practical area of difficulty for anyone trying to do business there. When I was running the Scotch Whisky Association, I certainly spent enough time hanging around state-level offices of various kinds, as well as regulators and so on, in different parts of India, trying to get a hearing. I know just how difficult that can be. That will remain even though the Government-to-Government level will be improved. We have to be realistic about that.
I am absolutely with the noble Lord, Lord Johnson, on the benefits of free trade and of imports in particular. I am glad to see that that has been noted at various stages in the reporting. The 25% long-run boost to imports from India is a good thing for British consumers. We must not forget that trade is about imports as well as exports, and I hope that this agreement will be a good example of that. I share the slight reservations about the business mobility arrangements and the double contributions convention. That was probably our biggest sticking point when we were in the EU, and our reluctance to seek movement on that was a difficulty, so it is interesting that when these things are now much more live as an issue, we have felt able to agree it—all the more need to have a proper impact assessment to assess what is going on here.
So much for the agreement. I want to say a word about treaty scrutiny because I am out of the country on 16 March and I have made a point of speaking about it every time I have had the opportunity. The current arrangements under CRaG are unsatisfactory in various ways. They are unsatisfactory at a micro level, in terms of the time limits and intervals, the room to allow the committee and others with an interest to have a proper debate about this, and there is the more fundamental issue that there should at some stage in the process be a clear up-or-down vote in this Parliament on a trade agreement. We got that when we were in the European Union through the European Parliament, and of course the CRaG Act was devised when we were in the European Union and got that sort of vote. It is very unsatisfactory that the arrangements in this Parliament should be less good in this respect than those in the European Parliament. I hope the Government can look at this. It is good for debate on trade policy to have a proper process in this Parliament, with proper debate where the pros and cons of agreements are fully understood.
The barrister and former legal adviser to this Parliament, Alexander Horne, has, I think, sent the committee a draft of a potential piece of legislation to show how such arrangements might work. Perhaps that will be looked at systematically one day. However, this cannot rest. We need better, more formal and more fully debated arrangements for major trade agreements such as this one. I look forward to hearing what the Government have to say on that point.
Baroness Prashar (CB)
My Lords, I, too, thank the noble and learned Lord, Lord Goldsmith, for introducing this debate. I commend the committee on its constructive assessment of this highly significant agreement and on situating it within a wider, coherent strategic framework that recognises India as not merely a trading partner but a global pillar of our economic resilience and long-term security and stability.
I have been working in the UK-India corridor for a number of years, and I have two interests to declare. First, in my capacity as a deputy chair of the British Council from 2012 to 2018, I was involved with the UK-India year of culture, which laid the groundwork for more effective cultural exchange, education and collaboration, as well as a deeper understanding of modern India and a changing UK.
Secondly, from 2020 to 2024, I chaired the Federation of Indian Chambers of Commerce and Industry UK Council, or FICCI. Through it, we worked closely with businesses across sectors to develop a memorandum, which was submitted to negotiators on both sides. That memorandum highlighted the practical challenges around non-tariff barriers and emphasised the importance of social security arrangements to support professionals working across borders. I note that, last month, both countries agreed to negotiate on the double contributions convention, which I see is now a work in progress.
Looking back over the past 10 years or so, a trade deal of this magnitude was a pipe dream. Talk of trade prioritised only petty give and take and was very transactional in its nature. Ashok Malik, a leading Indian journalist, described it as a nation of shopkeepers talking to a civilisation of bargain-hunters. My experience with FICCI and the British Council underlines the point made by the committee that,
“there would be mutual benefit to both parties in further strengthening the relationship, particularly in areas not included in the Agreement”.
Further, the committee urged the Government to,
“utilise the range of existing dialogue mechanisms and networks to further enhance the relationship in substantive and symbolic terms”.
I cannot emphasise this enough because the work that we did in education is now paying dividends.
As other noble Lords have said, this agreement is a foundation to build on. It is an investment in our future relationship with India, and it sends a powerful message that co-operation grounded in shared ambition remains the most effective response in an increasingly uncertain world. It signals a commitment to building a durable partnership with a fast-growing democratic country. It is forward-looking and value-based and has the potential to contribute to the world governance architecture. It is compliant with the WTO rules and contains chapters on labour, the environment, development, gender equality and anti-corruption. The liberal public procurement provision, which partially opens the Indian procurement market for the first time, is welcome and should be built on. It secures an improved open market for exporters, although more work is needed.
There are shortcomings, of course; these are clearly highlighted in the report. Yes, the agreement does not liberalise services beyond the current WTO commitment, and, as has already been said, the exclusion of legal services is a disappointment and a missed opportunity. These are concerns. There are, of course, concerns around the use of non-tariff barriers and the quality control orders that will require monitoring and addressing through continuous work and engagement with India.
However, these shortcomings should not obscure the clear advantages and opportunities the agreement provides. The real test will be in implementation—ensuring the opportunities are understood, appropriate dialogues are facilitated, small and medium-sized enterprises are supported to navigate their way through complexities and all relevant parties are engaged in helping to realise the agreement’s full potential. I am aware that there are mechanisms in place and the JETCO is being revived, but these must be made to work. We must not lose the momentum.
Furthermore, India is not just a large market but a rising power, a key Indo-Pacific actor and an increasingly influential voice in shaping global norms. Technology governance, supply-chain resilience, climate transition, maritime security, counterterrorism co-operation and cyber resilience are all areas where strategic alignment is necessary. So, a mature partnership with India is an imperative, and this, I am glad to say, is recognised in the national security strategy published last year.
A successful implementation and deepening of our broader relationships will be shaped by how we handle trade irritants, pinch points, regulatory dialogue and other political sensitivities, because our relationship must be framed on the basis of mutuality. This means recognising India’s strategic autonomy and distinct foreign policy tradition, and it means engaging with respect, building trust through meaningful engagement and consistency and collaboration.
India is also diversifying its partnerships. We are now one among many partners and we cannot be complacent. As the report says, given the size and significance of India, the Government should give high priority to this deal and treat it as a living instrument. We must ensure that our competitiveness is not inadvertently weakened. We must articulate what is distinctive about this partnership. We bring enormous strength to this relationship—deep educational and research collaboration, legal and institution familiarity, extensive diaspora ties that are lived and dynamic, and much more. Our industrial strategy supports this agreement in areas such as manufacturing, clean energy, financial services, life sciences, digital technology sectors and creative industries.
As others have said, this agreement is a real achievement, something which did not look possible a decade ago but its success will depend on our operational readiness, our coherent and strategic vision of our relationship with India, and how we engage with the India of today.
The Earl of Dundee (Con)
My Lords, I join in welcoming this trade deal, yet, as others have said, with certain reservations and concerns. In my remarks, I will briefly touch on three points: redressing and ironing out certain trading inconsistencies; upholding human rights standards; then ensuring that a concordat such as this properly punches above its commercial-deal weight in order to assist international peace and stability.
Such as for Scotch whisky, mentioned with enthusiasm by the noble Lord, Lord Anderson of Swansea, and my noble friend Lord Johnson of Lainston, there is clearly good scope for United Kingdom exports, along with cars and medical equipment; while as well for Indian exports, including textiles, leather and jewellery. Trade volume forecasts indicate a consolidated annual supplement of £25.5 billion by 2040.
However, as already implied, tariff cuts for United Kingdom exporters may be phased faster than for Indian producers, thereby implying imbalanced gains. As also referred to by my noble friend Lord Johnson, non-tariff barriers like regulation differences still appear to threaten trade, in particular for United Kingdom firms attempting to sell into India. What actions will the Government take to reduce and remove these anomalies?
Then, as the noble and learned Lord, Lord Goldsmith, emphasised regarding our United Kingdom legal, healthcare and financial services sectors, current arrangements remain limited, consequently underutilising one of our key strengths. What plans, therefore, do the Government have to correct this oversight?
I turn to human standards, beginning with labour rights. So far within the deal there may be insufficient protections for minimum labour rights and social standards, especially in developing industries. And in India, small domestic industries will find it hard to comply with the technical, environmental and other stipulations necessary for exports.
If the Minister agrees with those strictures, can he say what adjustments the Government are prepared to make?
On a connected and wider front, he might also want to comment on the allegation that, since the agreement does not enforce provisions on any of human rights, environmental protections, labour standards or climate goals, then, to a disproportionate extent, it seems to put commercial objectives well before other relevant considerations.
Certainly the deal’s education agenda is much to be supported and in several respects: mutual recognition of qualifications; measures promoting academic partnership and skills mobility; and its encouragement to Indian students and professionals to study and work in the United Kingdom.
I declare an interest as a recent chairman of the Council of Europe’s committee for education. During its G7 presidency in 2021, the United Kingdom gave a commitment to promote education opportunities, particularly for women, in the third world and elsewhere in countries where education systems do not fully operate.
Does the Minister, therefore, concur that the education agenda within the India trade deal also provides a useful launch pad to extend, broaden and honour the United Kingdom’s given commitment; and thus to do so both within and beyond India as well?
To assist peace and stability, just such international initiatives for all world communities can help to bring closer the objectives of United States President Roosevelt, which he expressed during the Second World War in 1941: freedom of speech, freedom of worship, freedom from want and freedom from fear.
In that context of punching above its weight and, as already indicated, provided the correction of some trade anomalies and a rebalancing of its combined purposes, this trade agreement has the opportunity to make a significant contribution.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the noble and learned Lord, Lord Goldsmith, and the committee for all their important work on this free trade deal. I echo the comments of both the noble Lords, Lord Hannay and Lord Frost, in expressing concern about the serious democratic deficit of the extremely limited scrutiny the UK Parliament has over trade matters, in contrast to the European Parliament, of course. It is one of the many losses of Brexit.
However, I respectfully disagree with the noble Lord, Lord Hannay, about the EU-Mercosur deal. That is not something we should want to copy. As the European Greens have highlighted, it raises grave concerns about food safety, food quality and animal welfare standards, and the likelihood of contributing further to deforestation, which the world and its climate cannot afford.
However, I agree with the approach taken in this debate by the noble Baroness, Lady Gill, in particular, who sees this trade deal as part of a much broader aspect of our relationship with India, which is crucially important. We are two of the middle powers that, in the model set out by Mark Carney in Davos, need to work together with other compatriots and smaller states to seek to stabilise a world in which the larger powers present a major threat to the security of us all.
Long-term strategic connections depend on economic and cultural ties and on our state’s capacity, in the UK, to co-ordinate internally between all arms of government. This means careful consideration of the treatment of Indian migrants to and residents of the UK, particularly in the context of the continuing hostile environment at the Home Office, which impacts so heavily on so many people. That feeds into, and is apparently fed by, the far-right political forces that are at play in our society, which are far too often funded and supported by external actors.
Building on that relationship means appearing to be a good partner not just to the Indian Government or even to major Indian economic actors but to the Indian people. That demands a recognition of the disastrous history of the British Empire in India—domination, forced starvation and abuse. It means acknowledging what the Indian people bring to the table in historic skills and traditional knowledge, and the enormous capacity of today’s young and educated population. I declare my membership of the APPG on Indian Traditional Sciences. Enabling the UK to be regarded as a constructive force demands acknowledging the past and building new foundations.
The Green Party brings a different view of trade from that of most of the other speakers in this Room. Our desire is for fair trade rather than a focus on free trade, for which so many have suffered while a few have benefited. It means trade that makes sense in terms of mutual benefit and minimal damage. I am afraid I very much disagree with the noble Lord, Lord Johnson. Trade should prioritise environmental sustainability, social justice and building strong, local, resilient communities, both here in the UK and in India, where that should be supported.
I have spoken before about food and animal welfare standards in relation to Mercosur. I have concerns about this deal on that basis, but I also want to stress that it is not just this deal; I expressed exactly the same concerns about the Australia trade deal, and I have very grave concerns about any US trade deal in that context.
Regarding the relationship with the Indian people and what our trade with them might do for the whole of Indian society, it is interesting to look at the Indian fashion industry, where this could be a real positive. In recent years, clothing exports from India have declined sharply as well-known fashion brands have moved production to places such as Morocco and Turkey, simply because of cost. India’s internal migrant workers have been particularly hard hit, often waiting outside factories for days for the chance of a single shift of work. It might appear that steadier employment and a more competitive sector are positive outcomes, but we have to acknowledge that the nature of this deal shapes the nature of the Indian labour market. Whether we are talking about denim mills in Karnataka or knitwear and spinning hubs in Tamil Nadu, the reality of the fashion industry in India is one of low wages and limited job security. With many of the workers being women, we are also talking about situations of gender-based violence, harassment and unsafe working conditions.
We have to ask: what is this deal doing? I have to acknowledge that there are positives in the deal. There are commitments, and there is a whole chapter on this issue, but it is there on paper as guidance, not as commitments. There is a familiar gap between commitments to decent work on paper and what really exists on the factory floors. I would appreciate a response from the Minister about how the Government will ensure that what is in the deal will be transferred to real action on the ground.
Looking briefly at that chapter, I draw on an interesting report from ODI Global, which I strongly recommend to noble Lords if they have not seen it. I do not have time to go into it here, but it looks at the issues of systematic barriers to women’s participation in trade. It acknowledges, as does chapter 23 of the deal, the diverse roles that women play in trade as workers, business owners and entrepreneurs. But the report suggests that the deal does not sufficiently recognise the differential impact of trade on women, not just as consumers of traded goods and services but as participants in local, national, regional and global supply chains.
The trade deal simply does not contain the mechanisms to do this. It mandates the establishment of a trade and gender equality working group and it creates a monitoring and evaluation system, but it is not strong enough. The words are there on paper, but we do not see a guarantee of delivery. There will be a joint committee overseeing the working group, but there is no specification of female membership of it. Will the Government ensure that we do not see a committee of men advising on women’s involvement in trade? I would love to hear something very firm on that. As for data analysis, data collection and research analysis, this is an area where the deal could be world-leading if it is delivered.
I said that we have to think about our relationship with the people of India. This has to be a deal that sets a foundation for a new kind of relationship, which means that it needs trade relationships and diplomatic relationships that are different to those of the past.
Lord Bates (Con)
My Lords, I entirely join noble Lords in thanking the International Agreements Committee for such a thorough and insightful report. I also thank the noble and learned Lord, Lord Goldsmith, for securing this debate and setting out the committee’s conclusions with such clarity.
His Majesty’s Government are to be congratulated on securing such a welcome free trade agreement with a major economy with which we enjoy strong cultural and economic ties, as well as shared democratic values. I am sure that, in turn, His Majesty’s Government would recognise the contribution of the previous Government to bringing this to fruition, especially the drive and determination of the then Prime Minister, Rishi Sunak—supported, of course, by my noble friends Lord Ahmad and Lord Johnson.
The Indian economy will be the fastest-growing major economy in the world, with its forecast growth recently upgraded to 6.9%. I hope that some of that Indian dynamism will rub off on our economy, where the growth forecast was downgraded from 1.4% to 1.1% yesterday.
That will be my last direct reference to the free trade agreement in my remarks, I am afraid. I put it in because I wanted to keep my remarks in order and let the Committee know that I wholeheartedly support both the free trade agreement and the work of the committee, but it is the admission price for me to make another point about a remarkable human being. He was an Indian doctor, and his name was Dilip Mahalanabis; he was known as “Dilipda” to his friends. His name may not be familiar to the Committee. Indeed, I am grateful to the House of Lords Library for confirming that his name has never been recorded in the Official Report of either House of Parliament; this is a humble attempt to correct that record.
Dr Mahalanabis was born in Bangladesh in 1934. He obtained his medical degree from Calcutta Medical College in Kolkata, India, in 1958. After qualifying as a paediatrician, he came to work for the NHS at what was then the Queen Elizabeth Hospital for Children in east London; it is now part of the Royal London Hospital. He was the first Indian doctor to be appointed a registrar at that hospital. He then returned to Kolkata, where he carried out pioneering research into treatments for diarrhoea.
In 1971, during the Bangladesh War of Independence, he was working in refugee camps on the border between Bangladesh and India when a cholera epidemic broke out in one of the camps. There was a shortage of intravenous saline, which was the traditional remedy for diarrhoea and dehydration, so Dr Mahalanabis produced a solution in which salt and sugar were dissolved in water then given to patients in cups and mugs; it could be safely administered by people with minimal training. The solution was extraordinary. His oral rehydration solution—or ORS, for short—was later found to reduce mortality by 90%, making it one of the greatest innovations in the history of medical science.
News of the innovation quickly spread. It was used effectively to treat cholera and diarrhoea outbreaks in Asia and Africa, then throughout the world. A Swiss company called Sandoz succeeded in packaging the ingredients in individual foil bags to prevent the absorption of moisture, allowing it to be transported safely and in the appropriate dosage; this made it accessible to millions of people around the world. According to UNICEF, the cost per sachet is three cents. That is around 2p to save a life, yet around 500,000 children under the age of five will die this year because they do not have access to a 2p sachet of oral rehydration solution and a litre of clean water.
Dr Mahalanabis went on to head up the cholera control unit at the World Health Organization and later served as the clinical director of the International Centre for Diarrhoeal Disease Research in Dhaka. He died aged 87 in Kolkata in 2022. His innovation of oral rehydration solution is estimated to have saved almost 60 million lives around the world so far. It is extraordinary.
Why do I mention this now? It is in part because libraries are filled with books about despots who have cost millions of lives, yet I cannot find a single book anywhere about this remarkable man. It is the nature of things that, because our news is filled with human failings and looming threats, we need to celebrate more remarkable examples of human goodness and kindness around the world, which are more common to people’s daily experience. Sometimes it feels as if we are drowning in a sea of pessimism about human nature. People such as Dr Mahalanabis throw us a lifebelt of hope through their example. We need to speak more about these remarkable heroes of humanity because, when we shine the spotlight on human goodness and celebrate the good in all human societies, we encourage more people to follow their example.
The dominant human trait that advanced our species and is responsible for all human progress is optimism. Helen Keller said:
“Optimism is the faith that leads to achievement”.
This is the reason why the average human lifespan in our world has more than doubled from 35 to 71 over the past century, and why 1.5 billion people have been lifted out of poverty in the past 30 years, 415 million of them in India. It is the reason why the number of childhood deaths has reduced from 10 million a year 25 years ago to 5 million a year now. Dr Mahalanabis was a wonderful exemplar of that spirit of human skill, ingenuity and optimism. He is a credit to India but, more importantly, he is a credit to humanity. His life and legacy should fill us with a renewed sense of hope for the future.
Lord Stevenson of Balmacara (Lab)
My Lords, like many others who have spoken today, I pay tribute to my noble and learned friend Lord Goldsmith for his superb chairmanship of the International Agreements Committee. In particular, I thank him for his work in guiding us through the process that produced the report that we are discussing today. I also welcome, although he is not in his place, our new chair who has, as he demonstrated in his speech, boundless enthusiasm for the work he has in hand. I winced slightly when he talked about doing even more work, because I have looked at our forward programme, but perhaps he has not. We are going to be working to midnight most times we meet, not just the relatively hard time we had under my noble and learned friend Lord Goldsmith. It is a very hard-working committee. Its reports are worth the sort of concern and discussion that we are having today, and I am pleased to be a member.
Along with the noble Lord, Lord Johnson, and my noble friend Lord Anderson, I was one of the committee members invited recently to discuss the report that we are discussing today with the Indian high commissioner. I can confirm from that meeting that there is absolutely no doubt that India regards this FTA as an important achievement and a signal of the determination of the current Administration in Delhi to ensure that India becomes one of the world’s leading trading nations in very short order. We have heard a bit more about that today. In our report, we congratulate the Government on their significant achievement in reaching this agreement. Our decision to draw the agreement to the special attention of the House and to have a debate on the grounds that it is politically important and gives rise to issues of public policy is certainly justified by the excellent list of speakers in this debate today.
I shall make three points, some of which have already been raised by others. We strongly welcome that this agreement is compliant with Article XXIV of the General Agreement on Tariffs and Trade. Beyond the important benefits of deepening bilateral co-operation and integration, an FTA between India and the UK offers stability to businesses at a particularly challenging time for international commerce and rules-based trade. Part of the uncertainty arises from recent fluctuations in US tariffs, which are undoubtedly going to go on, but we also heard evidence that there has been a growing tendency for protectionism and, as one witness said, that trade is increasingly embedded in geopolitical strategies. One important element of this FTA is that it signals to the world that both parties are seeking out what another witness called,
“reliability, resilience, ownership and security”
in their economic relationships going forward. We can hope that other countries see the benefits in making agreements of this type within the WTO rule-based system.
Secondly, we welcomed the evidence we heard that this agreement secures improved up-market access to India for UK exporters. The new preferential access, however, needs to overcome the many non-tariff barriers recently introduced by the Indian Government that have already been referred to. These are based on a number of quality control orders. When we met the Indian high commissioner, we asked what action was being taken on non-tariff barriers to trade. The commissioner was very reassuring that this issue would be handled quickly, but we additionally recommend that the Government
“ensure that industry has sufficient support to navigate and tackle … the complex regulatory environment in India and divergences between different Indian states”.
We also note
“the concerns raised by domestic industries about the additional competition that domestic agrifood, food and drink producers will face as a result of the immediate liberalisation of the UK markets for the vast majority of product lines”,
as we have heard. We recommend that the Government set out their assessment of the impact on the food and drink industries of competition from the Indian market in England and the devolved Administrations and urgently bring forward any measures they intend to put in place to support these industries, as may be required.
Thirdly, we note that the agreement does not liberalise services trade to the same extent as goods trade. As others have pointed out, there is relatively new market access for legal services in particular. However, procurement is opened up, which will certainly make a huge difference for certain British trading companies. Having said that, the agreement represents one of the most significant commitments that India has made to the liberalisation of digital trade to date. We recommend in our report that the Government
“develops a clear strategy to counter restrictions and build on the digital provisions in the Agreement in ways that promote the UK’s policy goals and are consistent with its digital commitments with other major trading partners, both now and in the future”.
Most speakers today have picked up that our inquiry highlighted the need for the trade agreement to be a living instrument and not just a static one. It is clear that a great deal of effort will be needed to ensure that UK businesses are in a position to take advantage of the opportunities offered by the agreement both here in the UK and through the High Commission of India through its regional offices. Given the size and significance of India, we recommend that the Government make that objective a high priority. I look forward to hearing from my noble friend the Minister how the Government propose to address this in the coming months.
Lord Sahota (Lab)
My Lords, I speak passionately in support of this landmark trade agreement between the country of my birth and my adopted country. This comprehensive economic and trade agreement represents a defining moment in our post-Brexit trade policy and stands as one of the most economically significant bilateral agreements we have ever signed. It is a deal that both Governments have described as historic in ambition and scope. It is designed to boost bilateral trade by an estimated £25.5 billion. It will increase UK GDP by around £4.8 billion and raise wages by £2.2 billion annually over the long term. Most importantly, it will unlock new markets and opportunities for British businesses and consumers alike. Some of these have already been mentioned.
The agreement will reduce or eliminate tariffs on the vast majority of goods traded between our two countries. India has agreed to cut tariffs on 90% of British products, with many phased down to zero or significantly lowered over a decade, including for iconic UK exports such as whisky and gin. Duties on these spirits will be reduced from 150% to 75% on its entry into force and then staged down to 40% over 10 years, opening enormous opportunities for one of our most valuable sectors. In return, Britain will eliminate tariffs on around 99% of Indian goods, expanding consumer choice and bringing greater variety and affordability to British households in products ranging from clothing and footwear to food, jewellery and speciality goods.
However, this agreement is about much more than tariffs and numbers. It delivers meaningful regulatory co-operation, streamlined customs procedures and new access to India’s public procurement market, worth billions annually and previously largely inaccessible to UK firms. It also contains provisions to support digital trade, protect intellectual property rights and facilitate collaboration on innovation in crucial sectors such as clean energy, advanced manufacturing and technology.
This deal has been recognised by the House of Lords International Agreements Committee as “a significant achievement” with “a formidable negotiating partner”, as has been said. That recognition matters: it underscores the strategic importance of this partnership in anchoring the UK’s broader economic and geopolitical engagement in the Indo-Pacific region.
Crucially, this agreement vindicates the vision of a globally outward-looking Britain. India is one of the fastest-growing major economies in the world and is projected to become the third-largest global economy by 2030. I thought it was by 2050 but the noble Lord, Lord Ahmad, said it would be by 2030, and I will accept that. By strengthening our commercial ties with India, we are not only expanding markets for UK exporters and investors but deepening political, cultural and educational links that have existed for centuries. The UK’s Indian diaspora, our living bridge of nearly 2 million citizens, will have a key role in supporting ever closer co-operation across trade, technology, culture and innovation.
This agreement is not simply an economic instrument; it is a reaffirmation of our global ambition and our commitment to inclusive, rules-based trade that benefits workers, business and consumers across our country. It reflects a modern partnership of equals, a far cry from the era when trade relationships were shaped by power rather than partnership. For those reasons, I welcome and support it.
Lord Kerr of Kinlochard (CB)
I shall save my panegyric on the noble and learned Lord, Lord Goldsmith, for 16 March. I had prepared several pages of panegyric, but he throttled me by reminding me that he has yet one more report prepared under his supervision to present to us.
It is a privilege to take part in the debate on this report. I particularly welcome the splendid attack on protectionism from the noble Lord, Lord Johnson, and the splendid panegyric on the EU from the noble Lord, Lord Frost. They were a great pleasure to hear. I welcome the report and, like the report, I welcome the treaty. It imports elements of stability and certainty into what has, from time to time, been quite a turbulent relationship and it makes, in the phrase of the noble Lord, Lord Johnson, some significant dents in the carapace. I agree with that and it is very good, but its title is a misnomer. It is absolutely not a comprehensive agreement, and the gaps are significant.
I find the absence of anything on investment protection particularly worrying. India is a paradigm case for ISDS. I remember that when the committee was thinking about the earlier report on the negotiating objectives back in 2022, we felt it would be well worth having a go at ISDS, but I do not know whether the negotiators did have a go. It seems to me that the India of today does not need to be as defensive on this sort of issue. India is big and powerful and should have more confidence in itself, which would point to me to a willingness to consider appropriate ISDS and certainly a degree of investment protection. That the bilateral treaty that we had was abrogated and nothing has replaced it seems very odd to me and a situation that should be put right.
The three big gaps highlighted in the report are serious too: the absence of anything on mutual recognition of qualifications; the absence of anything much on financial services; and the total absence of anything on legal services. The legal services one particularly surprises me. Think of Gandhi and Nehru: they were proud of their Inns of Court training and rightly strong in their criticism of past colonial protectionism, so it is very odd that their heirs are determined to keep the English Bar at bay. I do not really understand it. I hope that the Government mean what the Secretary of State said in the other place on 9 October when he said that the Government would go on working to fill all three gaps. It is in both sides’ interests that those gaps are filled. I agree with the attack on mercantilism from the noble Lord, Lord Johnson. It would help India as much as it would help our service exporters.
On 16 March, we will be talking about the accountability gap. I have a personal theory, with which I have bored the noble and learned Lord, Lord Goldsmith, down the years, that we, as a country, have disarmed our negotiators by making it impossible for them to use the argument, when a proposition is being rejected by the other side, that “You have to agree to our proposition because we will never get this ratified if you do not”. American negotiators use that argument all the time. They say, “Okay, you could be right, but we’d never get it through on the Hill”, and they mean it. As the noble Lord, Lord Frost, has been pointing out, EU negotiators can use that argument. They used to say, “You may say that, but we would never get it through the Council”. Now they can also say, “We’d never get it through the European Parliament”. I modestly point out that the change that so pleased the noble Lord, Lord Frost, came as a consequence of some work done by a convention under Valéry Giscard d’Estaing about 23 years ago.
The problem we have in making that sort of threat credible is that our scrutiny procedures are plainly so thin that the threat is not plausible now. Our negotiators cannot say that because the other side knows that our scrutiny is a pro forma formality because Whitehall prefers to treat Westminster, and certainly the House of Lords, as mushrooms. They keep us in the dark and they feed us with—I will not go on. There have been honourable exceptions: the noble Lord, Lord Johnson, was one and the noble Lord, Lord Grimstone, was another. I have to admit that my old department, the Foreign Office, has been resistant to the kinds of changes that those handling trade have been willing to contemplate. That is a shame and we should put it right.
I do not blame the negotiators for not delivering on their negotiating objectives. They did not do so, but the negotiating objectives were unrealistic, as the International Agreements Committee pointed out in 2022. We were sceptical that it could be done.
I was relieved that a row about visas did not break the agreement, because we thought it might well do so back then. I worry, however, that what we are now doing about visas—the changes in our immigration policy that the Home Secretary put in her White Paper—will, if they happen, certainly not be conducive to a deepening of the business relationship between India and the UK. I am thinking in particular of the lengthening of the period before one could seek indefinite leave to remain or citizenship and of the earnings rule applying to individuals, not households. One may therefore have to consider choosing between the family staying or the wife departing. That is no way to deepen a business relationship. I do not know if the Government are going to do that or make it retrospective, which would be even worse. We need to bear in mind that the relationship between the two countries is people based; if one lets visa policy prevent deepening that relationship, that would be a shame.
Lord Sikka (Lab)
My Lords, I thank the International Agreements Committee for its thorough and insightful report. I welcome the UK-India trade treaty and congratulate the Government on securing this agreement in a very short time. Inevitably when sovereign states negotiate, there is give and take and compromises, and this treaty is no exception. Some may scoff at the possible 0.13% increase in UK GDP but, in a world marked by Trumpian trade wars and tariffs, nations need to diversify trade as a buffer against emerging imperialism.
The trade deal is not comprehensive, as has been pointed out, but I support the Government’s step-by-step approach, which will be more productive in the long run. Inevitably, at the moment, both India and the UK want to protect certain segments of their economies and I hope that in time the scope of this treaty will expand. A huge positive for UK-based companies is that they can now have better access to Indian public procurement and government contracts, especially as India is expanding its infrastructure investment and its Government are heavily investing in semiconductors, rare earth minerals and other supply chains.
However, I have a number of questions for the Minister, whom I thank for the briefing earlier in the week. I have searched the various chapters of the treaty but could not find anything about the currency in which the trade between the two countries is to be settled. Will it be in the local currencies or in US dollars? The answer matters. If the trade is financed in local currencies, there is a potential for saving considerable transaction costs and greater potential for expansion of trade, as BRICS countries have already shown.
Since the Second World War, the US dollar has functioned as international currency, which skews world trade because countries undertaking international trade, even though they are not dealing with the US, have to spend money on currency hedging, so countries incur hedging costs and US financial institutions profit from every single trade. Is it free trade? Forget it: it is free money for US financial institutions. The dollarisation of world trade allows the US Government to impose arbitrary financial sanctions on trade that they do not approve. We have seen President Trump exercise that power. Is the UK-India trade agreement unintentionally increasing risks to countries such as India, which has already been bullied for buying Russian oil? Can the Minister shed some light on the discussions about the new financial risks that might be created as a result of this treaty and how much profit will be made by US financial institutions as a result of this trade treaty?
Questions have already been raised about the sanctity of intellectual property rights, and I hope the Minister will explain how the treaty will protect the intellectual property rights of pharmaceutical, technology and other businesses.
There are always issues about non-tariff barriers, which any sovereign state can create at any time, in the form of licensing, various bureaucratic rules and other practical procedures.
International trade also raises questions about transfer pricing, tax structuring and the implications of indirect taxes and customs duties. Again, I struggle to find anything about that in the treaty or in the committee’s report. The OECD convention on transfer pricing has become dysfunctional, and the BRICS countries have developed their own pragmatic rules. In other words, the rules applied across the globe are not consistent; they cannot be consistent because of the way the international economy is constructed. Can the Minister explain how difficulties arising from different transfer pricing regimes will be resolved? I hope the Minister will not say that some kind of obscure panel will look into it, because those kinds of panels do not carry any weight in these disputes.
Fair trade and competition also rest upon labour rights. As a founding member of the International Labour Organization, India has ratified the core conventions, including six of the eight fundamental conventions covering forced labour, child labour and non-discrimination, but it has not ratified Convention No. 87, which relates to freedom of association and the protection of the right to organise, or Convention No. 98, which relates to the right to organise and collective bargaining. Can the Minister explain what discussions have taken place between the two Governments about this and what their impact is on this treaty?
Several speakers have highlighted the absence of legal, accountancy and other services from the agreement. I am a bit more relaxed about this because, over the years, we have come across all kinds of evidence—literally running to hundreds and thousands of transactions—of sleaze relating to law and accountancy firms. These revelations have been made via the Panama papers, the Bahama leaks, the Paradise papers, the Pandora papers, the Swiss/HSBC leaks and any leaks you can think of. They show that UK-based and Crown dependency-based law and accounting firms are absolutely central to global sleaze, and I do not think that any emerging economy needs to import more sleaze via trade treaties. They have plenty of their own homegrown sleaze.
Will the Minister say what steps the Government are taking to cleanse these sectors so that they can be considered worthy candidates for expanded international trade? At the moment, the Government are deregulating. They expect regulators to promote the growth of law firms, accounting firms and the related sectors, which means there will be even less effective oversight. I hope the Minister can answer my question about what the Government are going to do to cleanse these sectors. We cannot be exporting corruption under the guise of trade treaties. Finally, I hope that this agreement between two countries with a shared history is a forerunner of something big in the not-too-distant future.
Lord Fox (LD)
My Lords, it is a pleasure to participate in this debate and to follow some excellent contributions. This report was the last one I worked on before rotating off the International Agreements Committee; I am missing it already. I congratulate the chair, my fellow committee members and the excellent secretariat, who prepared this report.
There was a sense, I detected, of government triumphalism when this FTA was announced. That was somewhat justified. India has been famously protectionist and discussions had been long in process, so this agreement was an achievement. The IAC report acknowledges this, and the negotiating team who delivered the agreement should be congratulated. In a world where rules-based multilateralism has been shoved aside by a new zero-sum game philosophy, as has been noted, we should salute that the deal is compliant with Article XXIV of GATT.
However, the arrival of the EU deal hard on the heels of the UK deal took some of the gloss off the potential competitive advantage for the UK that could have been delivered. I have previously asked the Minister in the Chamber for some analysis of the two trade deals. It would be good if he could put on the record the department’s current analysis of their relative values and the disparities between them, as well as how his department will act where the EU has a more beneficial term than we find in our deal. After 14 rounds of negotiation, it may have been the charisma of this Government that finally helped the deal across the line. However, I note that the presence of Trump’s tariffs must have loomed large in the minds of the Indians and assisted the EU, the UK and others in getting their deals across the line.
Not unlike when we signed the CPTPP, there is talk of strategic realignment for the UK following this deal. Personally, I would be a bit cautious about the rate or significance of change that we might see as a result. However, the Government and our report speak about making this a starting point; a “living bridge” is the language used. It offers an important framework for future bilateral co-operation, which is how we should view it.
As has been noted, as things stand, the UK has a trade deficit of around £9.7 billion with India, including a services deficit of £5.1 billion; those figures are based on Q2 2025 numbers. As was set out by the noble Lord, Lord Anderson, the scale of the potential deal is dwarfed by any future realignment or new alignment with the EU, but it is, as has been said, a significant possibility. I was surprised at the scale of the services deficit between our two countries.
I highlight that because, as many of your Lordships have said, the services part of our economy has not been included in much measure. It is largely absent, with limited or no agreements on liberalisation. Legal services are left out; there is small movement on financial services; and there is no mutual recognition of professional qualifications, no commitment to cross-border data flows and no bilateral investment treaty, as the noble Lord, Lord Kerr, mentioned.
The Law Society has bemoaned the failure to include legal services in the FTA, dubbing it a “missed opportunity” for the UK economy. For reference, India is one of the last large jurisdictions in the world in which the establishment of foreign lawyers is not possible, meaning that a lot of India-related legal work currently takes place outside India. The negotiators tried, I think, to gain access for our hugely successful professional services exports, so I am sure that the Minister would like to set out for your Lordships some detail as to why the final FTA failed to reflect any meaningful progress in this area.
More generally, given the Government’s stated ambition to promote high-value services trade, how will the Government pursue a side agreement with India to liberalise its professional services markets? In the meantime, what steps is the Minister’s department taking to support UK professional services businesses that face restrictions in accessing the Indian market? How will the Government help them trade?
As we have heard, it is a different story for goods. There are benefits for UK exporters, but a lot of them will not accrue for some time. India will reduce trade barriers gradually over 15 years, while Indian exporters will generally gain immediate access to the UK market. When it comes to our farmers, they often seem to be the sector that misses out—or, worse, is sacrificed for other potential gains. The previous Conservative Government undermined British farmers and our rural economy by agreeing to detrimental deals with Australia and New Zealand; those who disagree should look up what George Eustice, who helped negotiate the deals, had to say about them.
One way to limit the scale of these sell-outs would be to involve the House of Commons in a vote on deals. I agree with the comments that we have heard about changing the way in which trade deals are monitored and approved by Parliament. With or without votes, the Liberal Democrats will continue to hold the Government to account to make sure that farmers are not undercut and that any imported foods meet the UK’s regulations on environmental protection and animal welfare.
The committee’s report contains specific concerns about the food and drink sector, for which access is described as “cautious and phased”. For food and other goods, the expanding Indian middle class may create long-term demand for high-quality, value-added UK products, but, for many products, the agreement holds long-term promise rather than providing immediate commercial gains. Some UK food products are excluded entirely, and others will benefit gradually. As I said, in most cases, tariff reductions or eliminations are staged over five to 10 years. As the son of a man who milked cows, I say with due to respect to the noble Lord, Lord Johnson, that our dairy industry is particularly likely to face increased competition from India without reciprocal access to that market.
Can the Minister outline what the Government are planning to do to address barriers such as the export health certificate for lamb, which currently makes exports of that product very difficult or impossible? More generally, will the Minister undertake to work with Defra and the devolved Governments to deliver a comprehensive review of the cumulative effect of successive trade agreements on UK agriculture? Further, as the noble and learned Lord, Lord Goldsmith, set out, there is scope for the Indian Government to introduce new so-called quality control orders. They hold the prospect of erecting new bespoke barriers for our exports, so can the Minister explain how the Government will monitor and police these orders? Also, how they will address their arrival with the Indian Government, if and when that happens?
The UK automotive industry also benefits largely from what I would call the “jam tomorrow” clause. Currently, India is closed to UK vehicles, so any access is a win, but access will come “progressively”, which is another word for “slowly”. Tariffs may fall, but quotas will remain. If all goes well, it could eventually be a big market for the UK, but that depends on the survival of the British car industry over the next decade and more; in the meantime, Indian manufacturers will have much better access from day one. There will be more Indian vehicles on British roads than the other way round for some time to come.
For this to be positive for our GDP, UK business has to be equipped with the knowledge of how to use this new access and navigate the not inconsiderable non-tariff barriers that will remain. Rules of origin are particularly complex and there needs to be an explicit effort from government to support businesses, especially SMEs, to fully utilise this agreement. This should include sector-specific guidance from the department and from the high commission in India. Following the excellent point from the noble Baroness, Lady Gill, how will we use the considerable links via the diaspora as a springboard into markets for us to take the benefit of this treaty?
There is also a likelihood of trade displacement and impacts on developing countries. In other words, goods perhaps previously sold by Bangladesh will be eased out in favour of goods being sold by India. I ask the Minister to undertake to monitor, in particular, the cumulative impacts of trade agreements on developing nations.
With apologies to the upbeat noble Lord, Lord Bates, I may have seemed a little gloomy in this speech, but its tone has been balanced by other speakers in this debate. In general, there is a danger of conferring too many hopes on this FTA, but it would be equally wrong to disparage it. It is a very good start.
Lord Hunt of Wirral (Con)
My Lords, I pay special tribute to the noble and learned Lord, Lord Goldsmith, for his pioneering work in chairing the International Agreements Committee. Several speakers have paid tribute to that work, but it goes far beyond this debate, although we are very grateful to him for moving the Motion that started it—and what an amazing debate it has been. There has been a great deal of passion.
I listened carefully to the noble Lord, Lord Sahota, who talked about deepening the links between the Republic of India and the United Kingdom, and to the noble Lord, Lord Sikka, who ended by saying that this could be the start of something that grows and grows. That was the general atmosphere of this debate. We even had time to hear from my noble friend Lord Bates on the amazing character Dr Dilip Mahalanabis, the Indian paediatrician who pioneered the use of oral rehydration therapy and saved so many lives. We have had a wide-ranging debate highlighting the successes of our partnership with India.
But we also look to the future. Several speakers tried to catch the attention of my noble friend Lord Johnson, who has taken over the chair, in trying to widen the scrutiny of Parliament over treaties such as this. That is not for this debate; there will be a debate on that shortly. However, I certainly benefited from what almost every speaker has highlighted as one of the best reports of its type that they have had the privilege of reading. My noble friend Lord Howell said that. I always respect the views of the noble Lord, Lord Anderson of Swansea, and have done for decades, as he knows, and he thought it was the best report he had ever read. Several others also paid tribute. I hope the message gets through to those who were responsible for this report that it has been so welcomed in this debate.
It falls to me to speak from these Benches on behalf of His Majesty’s Official Opposition. I do so with a mixture of genuine welcome and profound disappointment: welcome because this agreement represents the fruits of seeds planted by the previous Conservative Government—it was good to hear from my noble friends Lord Ahmad of Wimbledon and Lord Johnson of Lainston that they started this whole process—but disappointment because what has been harvested falls considerably short of what British businesses, farmers, lawyers and investors deserved and had every right to expect.
One sentence, which several speakers have referred to, was very revealing. As a committee, the report said,
“we highlight the need for the UK-India trade agreement to be a living instrument, rather than a static one”.
I hope the Minister will take that, as he responds to the many questions which have been posed to him, as his soundtrack for demonstrating that this is just the start. There is so much else still to be done.
It was of course His Majesty’s Official Opposition who laid the foundations on which this agreement rests. I put this to the Committee with the greatest seriousness: we have to ask ourselves whether this deal will prove to be an exception rather than a template. While the Government stand at this Dispatch Box and trumpet the virtues of free trade with India, they simultaneously pursue, with quiet but unmistakeable determination, a path of ever closer alignment with the European Union.
The noble Lords, Lord Anderson and Lord Fox, and my noble friend Lord Frost referred to the fact that we now have two deals. I think we need an analysis, as the noble Lord, Lord Fox, just asked for, of the differences between the trade deal that has just been negotiated by the Republic of India with the European Union and this international UK-India comprehensive economic and trade agreement. I am sure that, although we will give the Minister as much time as he needs, there is probably not time to set out all the differences. I can readily appreciate that there will be areas that concerned the European Union which we would not be that concerned about—certain products and services—but certainly, so far as our financial, professional and legal services are concerned, we really need to know why this agreement is such a disappointment.
As all speakers have agreed, India is the United Kingdom’s 11th-largest trading partner. It is a nation that represents probably one of the most significant consumer opportunities available to British exporters anywhere in the world. My noble friend Lord Ahmad, after his 10 years as a Minister, highlighted that India is a nation that represents one of the most significant opportunities available to us anywhere on the planet. Yet, under this agreement, 99% of Indian goods imported into the United Kingdom become tariff free. Immediately, from day one, Indian exporters will gain full, immediate and essentially unimpeded access to British consumers and markets. Meanwhile, UK exporters will not receive that treatment, and we need to know why. My noble friend Lord Dundee posed these questions. I look forward to hearing the Minister’s answers because he must explain to this Committee why British exporters were placed at this disadvantage. What was the strategic rationale? What concession did we extract in return?
Several noble Lords mentioned the whisky industry, which provides a vivid illustration of the broader picture. A tariff of 150% is reduced to 75% on day one and will be reduced to 40% only by year 10. The Scotch whisky industry, one of Britain’s great export success stories, one of the jewels of our manufacturing and agricultural heritage, must wait a decade to see tariffs reduced to a level that is, let us be frank about it, still remarkably high. Our competitors will not be standing still in the meantime.
I turn to probably the significant omission, speaking now as a practising solicitor, still. The omission in this agreement that I regard as one of its most serious and damaging failures is the treatment, or rather the non-treatment, of legal services—as the noble Lord, Lord Hannay, pointed out, services represent virtually 80% of our economy—and the missed opportunities. Like the noble Lord, Lord Kerr of Kinlochard, I cannot quite understand why they have received this treatment. As the noble Lord, Lord Fox, pointed out, the Law Society and the Bar Council have described this deal as a missed opportunity. The very practitioners who would have benefited most directly from meaningful market access provisions for legal services have looked at this agreement and concluded that it falls far short of what should have been achieved.
I suppose in many ways our own International Agreements Committee has gone further still, describing the exclusion of legal services as a strategic error and noting that legal services do not merely serve their own sector but actively support and facilitate trade across virtually every other sector of the economy. Data from the Law Society shows that in London, 83% of lawyers working in the largest 50 international law firms are UK-qualified. This shows that international firms overwhelmingly create employment for local lawyers, rather than importing lawyers from overseas. I feel that an open legal services market creates high-skilled employment, particularly for young professionals. At a time when youth unemployment in the UK is higher than anywhere in the EU, expanding opportunities in globally competitive sectors such as legal services should be a government priority. I would love to hear from the Minister that it is.
The noble Baroness, Lady Gill, with all her experience in the European Parliament, reminded us of the importance of SMEs. My noble friend Lord Howell of Guildford gave us the statistic that small businesses—those with between nought and 49 employees—make up 99.18% of the total. What a shattering statistic that is. What is going to happen so far as SMEs are concerned? The noble Baroness pointed out that they need extensive support. I think her phrase was “targeted facilitation”; I hope we will hear from the Minister that he is determined to provide that.
Perhaps in summary, we just need to know from the Minister what representations were made to the Indian Government on the inclusion of legal services. What was the response? What is the concrete, timetable-specific plan to address this omission in future negotiations? What assessment have the Government made of the implications for UK legal services exports and the economic impact of the absence of provisions on market access in the UK-India trade agreement?
Like the noble Lord, Lord Fox, I share the concerns raised by the National Farmers’ Union and Dairy UK. Their analysis shows that British dairy exporters gain no meaningful reciprocal access to the Indian market. We open our doors; they just do not open theirs. Several speakers have asked that we should now look into the extent to which British dairy farmers, already under enormous pressure and struggling with cumulative costs of this Government’s policy choices, surely cannot be told just to get on with it. There has to be some recognition of their concerns.
I suppose this is not an isolated concern. As several of my colleagues have pointed out, it is part of a pattern because every time this Government have a serious opportunity to achieve meaningful economic growth, stand before the British people and the British business community with the tools genuinely to empower enterprise, to unleash the productive potential of this economy against protectionism, and to demonstrate that a Labour Government can be a friend to business, they fall short. The Minister has the chance to put that right.
The Government have an opportunity to demonstrate how this agreement can be the living instrument that your Lordships’ committee described. As my noble friend Lord Johnson of Lainston reminded us, the Conservative Party is the party of free trade. We will continue to hold this Government to the highest standards in their trading ambitions because British businesses, workers and consumers deserve nothing less.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, I am pleased to respond for the Government. I am grateful to my noble and learned friend Lord Goldsmith and the International Agreements Committee for securing the debate today. I am pleased to echo the comments made about my noble and learned friend’s exemplary work as chair of the IAC. I also acknowledge the important work that went into the considered, robust recommendations of this report and the many comments that have encouraged the quality of that work by the team here today.
I begin my remarks by advising noble Lords, having spoken with the officials who negotiated this agreement, that now that they are leading its entry into force the focus has decisively shifted from signing to delivery, and that work is progressing apace. With that in mind, I should like to talk about why the deal discussed today is so important, and, more broadly, why the UK-India economic and trade relationship is so valuable, as many noble Lords have mentioned.
The UK did £47.2 billion in trade with India in the past year. That was up 15%, year on year, and India is now our 11th-largest trading partner. However, as many noble Lords mentioned, it is India’s future potential as an economic partner that stands out. India has the highest growth rate in the G20. It is likely to become the third-largest economy in the world by 2029 and, by 2050, it will be home to more than a quarter of a billion high-income consumers.
Demand for imports is due to grow as well, reaching £2.8 trillion by 2050. Assuming global FDI into India continues on its recent trajectory, it could grow to be worth £1 trillion by 2033. Noble Lords will understand why this has a particular resonance for me as the Minister for Investment. I thank the noble Lord, Lord Kerr, for referencing investment, and express my delight that investment sentiment has already increased since the deal was signed. However, the opportunity runs far deeper than statistics.
The United Kingdom and India share a unique historic relationship that many noble Lords have referenced—one built not only on institutions and commerce but on people, ideas and innovation. The Indian diaspora, as my noble friend Lady Gill mentioned, is one of the UK’s greatest strengths. It is a true living bridge that shapes our economy, public services and universities, and the character of modern Britain. Despite the strength of that relationship India’s market, as my noble and learned friend Lord Goldsmith rightly noted in his opening remarks, is also behind some of the highest barriers to trade in the world. In 2024, India was ranked by the OECD as the eighth most restricted service market and it has some of the highest tariff rates in the G20. Gin and whisky tariffs are at 150%, cars 110%, cosmetics 22%, and soft drinks, lamb, fish, chocolate and biscuits are all at 33%. That sounds like a menu in the Stockwood household, but I wanted to quote some of those tariffs.
It is worth noting that India’s protectionism is not just a matter of policy; it runs deep in its national story. At independence, the burning of foreign cloth became a symbol of economic self-determination. So, when India agrees a deal of this depth, it is not just a small adjustment; it is a significant shift marking progress in the relationship between our two countries. It is in this context that the agreement secured by this Government should be viewed as a momentous achievement. Others had been trying to get a deal like this one for years and failed, but this Prime Minister, along with the then Business Secretary and Trade Minister, has literally brought home the goods.
The agreement goes well beyond India’s precedent, opening the door for UK businesses. The Commons Business and Trade Select Committee said in its report that this deal
“is the UK’s most economically significant bilateral free trade agreement since leaving the European Union”.
It will boost UK GDP by £4.8 billion—approximately 0.13%—and wages by £2.2 billion and is predicted to boost bilateral trade by £25.5 billion by 2040. For those who says that 0.13% sounds modest, I simply ask: what other single, practical step on the table today could bring the same level of economic development?
I ask noble Lords to bear with me for a second as I have lost my place; as a technology entrepreneur trying to use technology, the irony here is not lost on me.
India will drop tariffs on 90% of its lines, covering 92% of current UK exports, giving the UK tariff savings of £400 million per year immediately on entry into force. This will rise to £900 million per year 10 years from now, even if there is no increase in trade. India’s average tariff will fall from 15% to 3%. Further, I emphasise that every region and nation will benefit from this deal, including a £210 million boost for the north-west, driven by aerospace and automotive wins, a £190 million boost for Scotland, supported by cuts on whisky and satellite tariffs, as well as financial services access, a £190 million boost for the east of England, generated through tariff cuts and improved rules for medical devices and clean energy products and a £50 million boost for Northern Ireland, supported by a reduction in the tariffs on industrial products for aerospace, medical technologies and electronics.
Of course, the deal will deliver these benefits only if it is used by UK businesses. This point was made by many noble Lords. We know that it will not always be plain sailing, thanks to varying rules in different states and provinces. The staging of tariff liberalisation will need some explaining, and non-tariff barriers can be just as important. This was alluded to by my noble friend Lord Sikka. That is why we are matching the agreement with practical export support, including stepped-up advice in market and the full range of UK Export Finance backing, so that firms—especially SMEs, which were mentioned—can turn preferential access into signed contracts.
I saw this at first hand during the trade visit with the Prime Minister in October, when we took a number of businesses—120 CEOs—to India. Two deals that had not been made previously were struck in negotiations during that week. A noble Lord committed on the impact on climate. One of those deals was on accessing technologies in the UK that could accelerate the climate transition for India.
Our department is committed to ensuring that businesses have all the support they need, which is why we have protected the DBT team in India. It is also why we have already engaged with more than 5,000 UK businesses through guidance, events and roadshows on how to exploit the CETA. Once we get to entry into force, we will monitor the operation of the CETA’s provisions, including through the regular reviews and the Joint Economic and Trade Committee—the JETCO —that are built into the agreement.
We will also try to resolve other market access barriers that are not covered in this FTA—many of them have been mentioned today—including legal services, recognition of qualifications and specific state-level barriers. The UK is clearly open to continuing negotiations on a bilateral investment treaty, as long as it works for UK businesses. As many noble Lords have said, this is the floor, not the ceiling. We will keep improving how the agreement works based on real feedback from UK firms.
This negotiation has never been about just the economic uplift that it delivers, substantial and important though that is. At a time when our global norms are under pressure, the UK is choosing to lead and to stand for open, fair and rules-based international trade. Agreements such as this are how we build resilience and prosperity for not just ourselves but our partners. This is how we build trusted economic relationships in a world that is changing fast, as evidenced by the past week’s circumstances.
The world is not the same as it was a decade ago—in fact, it is not the same as it was last week. In this new global order, strong bilateral partnerships that are rooted in shared interests and delivered through serious, detailed agreements are how we secure our long-term position. This is a proper, thorough, detailed, old-fashioned treaty. It has hundreds of pages—as we saw on the desk of the noble Lord, Lord Hunt, earlier today—with commitments negotiated line by line. It is real, serious work that shows that the UK is a credible partner on the world stage. It reflects this Labour Government’s approach more broadly: being committed to the hard graft needed to get these deals done.
As previously mentioned, this deal is more about shaping the standards of the future, building trusted economic relationships and ensuring that countries that believe in openness and fair competition can work together. We have secured India’s first ever chapters on anti-corruption, consumer protections, labour rights, gender and development. The agreement also includes the strongest environmental commitments that India has ever made in an FTA. As the noble Baroness, Lady Bennett, referenced in her remarks, this is the start of a conversation, and we need to go further. I also take this opportunity to flag that the deal was negotiated by two formidable female chief negotiators, Kate Thornley and Nidhi Tripathi, showing both side’s commitment to putting women at the top table.
In response to my noble friend Lord Sikka’s points on corruption, the deal includes an anti-corruption chapter that has obligations to maintain measures on the criminalisation of bribery and prohibiting fraudulent book-keeping practices; the prohibition of facilitation payments; the criminalisation of embezzlement and money laundering; and whistleblowing protections—all things that we take incredibly seriously. In drawing attention to these crucial social chapters, I am keen to emphasise the importance of these agreements in strengthening real partnerships between nations and facilitating important, frank conversation in matters beyond the economic things set out in an agreement.
Turning to the European Union, we understand that it has now reached a political agreement on its own FTA with India, as many noble Lords have mentioned, where it seems that the UK deal was used as a baseline. We should in fact take this as a massive compliment, and we will be going through that agreement line by line to check the mark-ups later on.
Crucially, the UK retains a first-mover advantage. I am hopeful that the deal will enter into force before the end of spring so that UK businesses can start exploiting these reduced tariffs this year, while the EU will take some time to achieve ratification. Only the UK has secured access to India’s £38 billion federal procurement market, as the noble Lord, Lord Frost, rightly acknowledged. I repeat that for impact: we are the only country in the world to secure that access. This is undeniably significant and a huge opportunity to a market that is growing at the rate India is growing.
Lord Fox (LD)
I really welcome the fact that the noble Lord’s department is doing that analysis. Can he undertake to publish it so that we can see what the comparisons are?
Lord Stockwood (Lab)
I thank the noble Lord; I was going to come on to that, but we can agree to that.
My noble and learned friend Lord Goldsmith, my noble friend Lord Anderson and the noble Lords, Lord Hunt and Lord Frost, all made reference to the EU-India deal. As champions of free trade, we welcome this agreement. In answer to the contention of the noble Lord, Lord Frost, that the EU secured a better deal—as well as the interest of the noble Lord, Lord Fox, in that question, as he just noted—I will push back and note that we struck the deal that was designed to be in the best interests of the UK, built on UK business priorities. However, we will come back and comment on the comparison between the deals as well.
As well as its unique procurement process and access, the UK secured proportionally better access to the cars market as compared to production levels. We also kept CBAM out of the deal, while the EU made a £500 million commitment on climate financing over the next two years. Further, the deal also has a mechanism to help us keep pace if India gives more to other partners.
I hope that noble Lords will agree that the CETA is a good deal for the UK. I am grateful for the contributions made in today’s debate. Before closing, I shall take the opportunity to respond to the outstanding points and questions that I have not mentioned already. I will be pleased to follow up with noble Lords after the debate on the specific questions asked and any areas that I miss.
My noble and learned friend Lord Goldsmith, the noble Lords, Lord Hunt, Lord Hannay and Lord Howell, and my noble friends Lord Anderson and Lady Gill rightly noted that the deal is a long-term strategic investment—a start, not an end. The Government strongly agree with this view and the need to energetically pursue the opportunities the deal presents. As I mentioned, we have already engaged nearly 6,000 businesses on the deal and are putting out guidance to SMEs, and we are already preparing for our first Joint Economic and Trade Committee and the multiple technical working groups that sit underneath it.
On the points raised about services, modelling estimates that, in the long term, services exports should increase by over £1.6 billion every year because of this deal. The deal binds in access to over 43 sectors, and key UK services firms such as EY and PwC have come out in support of the FTA.
The noble Lord, Lord Ahmad, asked about professional qualifications. I can tell him that the regulators will be supported by a professional services working group that will support engagement between the UK and Indian bodies. That work is already under way.
On specific sectors, the noble Lords, Lord Howell and Lord Kerr, and my noble friend Lord Anderson noted the importance of legal services. As already mentioned, it is worth recognising that the UK treats the law as a noble profession, making access incredibly difficult. Through the negotiations, we have strengthened our ties with India’s legal system, and we will continue to support British lawyers and law firms seeking to operate in the Indian market. As the deal progresses, we hope to enter into further negotiations about access, particularly around legal services, but we recognise that this is the start of the deal rather than the conclusion.
My noble friend Lady Gill and the noble Lord, Lord Johnson, rightly mentioned the importance of using this deal as a platform for innovation. We have set up an innovation working group, which will bring together government, business, research institutions and academia to ensure that this framework of trade is fit for the future and supports the commercialisation of new technologies, which India excels at, as well as our own reputation globally. This will cover numerous sectors, including AI, quantum, advanced manufacturing and many others as we develop and progress. Indeed, on my trip in October, I found the energy and innovation sectors incredibly impressive. Where India is leading in many of these sectors, we need to be a partner.
The noble Baroness, Lady Prashar, the noble Earl, Lord Dundee, and my noble friend Lord Stevenson raised India’s non-tariff barriers. We have addressed non-tariff barriers in the agreements, from frameworks for mutual recognition of conformity assessments right down to the practical benefits, such as streamlined labelling requirements and the use of stickers—something that businesses regularly raised. Again, this will be a work in progress, and we recognise that there is some way to go.
As mentioned by my noble and learned friend Lord Goldsmith and the noble Lord, Lord Fox, India has recently rescinded on a large number of quality control orders in the industrial space. We are keen to build on the momentum and are actively encouraging India to review its trade-restrictive barriers on other products, both bilaterally and through work at the WTO. As the noble Lord, Lord Fox, suggested, we will continue to work to reduce these barriers, at both federal and state level, within and outwith the FTA.
Turning to goods, the noble Lord, Lord, Fox, raised dairy. All our current food standard protections remain in place. India does not have an approved veterinary residue plan for dairy, so any dairy products originating in India cannot be imported. I thank the noble Lord for his points on agriculture across the FTAs more widely. I commit to taking them to my colleagues in Defra and will write to him on some of the specifics that he raised.
On protecting the goods industry more generally, this deal includes a bilateral safeguard mechanism that allows us to temporarily suspend or increase tariff concessions if an industry is suffering or facing the threat of serious injury because of reduced duties in the CETA.
The noble Lords, Lord Ahmad and Lord Fox, asked whether we could have secured a quicker and more balanced trade liberalisation. As I noted earlier, the UK maintains a significant first-mover advantage, and we have secured a greater share of tariffs eliminated on day one of our agreement than the EU—64% compared with 49.6% of tariff lines, as we currently understand it. We expect the deal to increase UK exports to nearly 60%, with imports expected to increase by only 25%.
I will address the points made about human rights by the noble Earl, Lord Dundee. The UK is clearly a leading advocate for human rights around the world and, as I mentioned earlier, having secure and growing trading relationships benefits the UK’s ability to influence our partners and helps us to have open and frank conversations on a range of issues, including human rights. We are hopeful that the trade deal we have set out here allows us to encourage those conversations.
With reference to the DCC and the IAC’s request for an impact assessment, I again thank the noble Lord, Lord Johnson, for advance sight of this question. Foremost, the net impact on the Exchequer and the British economy of this agreement is significantly positive. The Office for Budget Responsibility will certify the impact of the CETA, including the DCC, in the usual way at the next fiscal event, once the deals have been finalised and ratified. We believe this is sufficient in reviewing the economic impacts of this convention.
The noble and learned Lord, Lord Goldsmith, asked about the impact on developing countries. I draw his attention to the trade and development co-operation chapter, which includes a commitment to monitoring the effects of trade agreements on developing countries, allowing risks to be identified and opportunities for development to be supported. Long-term analysis set out by the UK Department for Business and Trade’s Global Trade Outlook still shows that we expect growth in countries across south Asia and the region.
The noble Lord, Lord Howell, asked about climate and emissions. I answer by saying that UK businesses have a lot to offer through trade, innovation and procurement, and the access secured in the FTA, to assist in the transition to a greener economy. I saw this first-hand, as I mentioned, in a couple of innovative businesses that we took out to India, generating contracts that can significantly impact the transmission profile of India itself.
I come now to the parliamentary scrutiny process of FTAs, raised by the noble Lord, Lord Hannay, and others. I note that, alongside updates to the House after negotiating rounds, DBT regularly updated both committees privately to ensure that they were fully appraised of the sensitive negotiations. We take the feedback on the robustness of that process seriously and will debate some of the considerations further in the coming weeks. I note that the FTA and its impact assessment were published in full and laid in the House on the day of its signature in July last year. We also provided extensive evidence to the BTC and IAC to inform their committee reports and we published our Section 42 report in November.
Furthermore, we proactively sought a debate in both Houses on this deal to recognise the relevant committees’ respective inquiries and our commitment to transparency. As one of the Ministers accountable, I can firmly commit to taking the feedback and enhancing that process as we go further as well.
I want to respond on the geopolitical points raised by several noble Lords this afternoon, which are particularly salient considering the events of the last few days. We continue to see unprecedented turbulence and challenges to economic growth, alongside wider systemic issues, both domestically and internationally. We need to go back to growth and, to do so, businesses need certainty and stability. As part of this Government’s commitment to growth, we published our trade, industrial and small businesses strategies last year. We set out a broader vision and need to keep strengthening our trade partnerships and ensure the agreements that we have signed deliver clear economic benefits. That is one of the reasons I came into government: signing the India deal is only the start. We now need to make sure that it delivers.
In conclusion, this is a historic agreement that marks a major milestone in the UK-India relationship economically, strategically and geopolitically. It demonstrates that, when the UK engages with its partners, we engage seriously with credibility, detail and respect. It builds on the unique historic relationship between our two countries, showing how we can move forward together rapidly in an ever-changing world.
I am particularly grateful to the noble Lord, Lord Bates, for his contribution about the story of Dr Mahalanabis —my apologies if I got that name wrong. In closing, I make the point that I agree wholeheartedly that the dominant human trait that drives our species is indeed optimism. While there is much work to do in making this deal work for the UK, there is much reason to be optimistic about it in its current form. I look forward to continuing constructive engagement as we move forward towards entry in force, hopefully in the spring.
Lord Goldsmith (Lab)
My Lords, it has been an extraordinary debate. I am privileged to have led it and to have led the International Agreements Committee.
It is a great shame that space and parliamentary time did not allow this debate to take place in the Chamber, because I think many Members of the House would have benefited enormously. They would have enjoyed and appreciated the contributions made today by so many noble Lords, which come from great experience: contributions from former Ministers, such as the noble Lord, Lord Ahmad, and the noble Lord, Lord Johnson, who has been a Minister as well as being the current chairman of the International Agreements Committee; from positions of stewardship of the British Council, like the noble Baroness, Lady Prashar; connections with the country, with the diaspora referred to by the noble Baroness, Lady Gill —the noble Lords, Lord Sahota and Lord Sikka, have extraordinary connections too—or even connections through family, although the noble Lord, Lord Johnson, told us he managed to contrive not to follow the family tradition, by being born somewhere other than India. These connections have led to a richness of experience and, importantly, the knowledge that has gone into this debate.
There are three points on which I want briefly to draw, if I may. The first is what was said by many Members of the Committee in relation to this being the start, not the end, of the journey. I am glad to have heard what the Minister said about the Government recognising that; obviously, people will look at his words carefully, but they will look even more carefully at the action the Government then take. As the noble Baroness, Lady Prashar, said, the real test will be in the implementation and the conclusion of the empty parts—that is, the things that have not been dealt with.
The second point I want to touch on briefly is the comparison with the European Union, which came up from time to time. We noted, as we finished the report, that the EU had reached its agreement and we wanted to know how well we had done compared with it. The Minister has now confirmed to the noble Lord, Lord Fox—I am glad that he pressed the point, as uncharacteristic as it was of him to do so—that we will see the comparison that his department has been performing. Everyone will be pleased to see that.
Surprisingly, I found myself in agreement with the noble Lord, Lord Frost, on something: we both agreed that there was one thing the EU did better than us—namely, the scrutiny that took place. This is one of the reasons why the scrutiny debate that is coming up will be so important: this Parliament has lost areas of scrutiny that we had. As a result—this may have been an unintended consequence, but that is not the point—the scrutiny from which this country used to benefit no longer happens. I hope that, when we come to the debate on 16 March, all noble Lords here today will attend and that we will push back on this issue.
The third point on which I want to touch simply concerns scrutiny and the accountability gap. Having chaired this committee for a number of years and sat through many debates, there are several things here that I hope the Minister will take away. I ask noble Lords to look at the end of this report and the number of witnesses we managed to have. There are two points to make about that. One is that we were fortunate to have the time to do it. Because of the agreements that had been made and the Grimstone commitments, we were able to get into this more deeply—and thank goodness we were, so that we could look at this matter more thoroughly than we would normally be able to do.
When it comes to looking at what the committee’s report said on scrutiny, it is important to consider the amount of work that was done by the very limited staff we had—and have—to get through all of this in that time. I invite the Minister to discuss that point with his colleagues and officials because we do not think that people always understand what goes into this committee’s work. The committee looks at things very seriously, sincerely and hard, but with the benefit of evidence, which we have to collect together at short notice in order to examine a treaty. We believe that this benefits the country. We also believe that it benefits the Government; that has been said in this debate, as well.
It is perfectly true to say—I have said this to Ministers before—that they do not have the opportunity to say to negotiating partners, “We’re very sorry but we can’t do that. Those people in Westminster simply won’t buy it”. That really has to be considered hard by the Government. Having been a Minister myself, I know that one does not like to have one’s work marked by Parliament, to some extent, but it can be helpful as well. I hope that we will come back to that.
I thank noble Lords for their kind remarks about the committee’s work and about me—part of me thinks, like somebody almost said, “They would say that, wouldn’t they?” It has been an extraordinary privilege to chair the committee, but I want to underline the work done by its members and its staff and officials. There are very few of them but they do an extraordinary amount, covering all the different territories, agreements and disciplines, including defence. The committee deals not just with trade agreements—I am sure the Minister will understand that—but trade agreements get the best deal because we have the benefit of the Grimstone arrangements, which do not apply to other treaties such as those on defence, Chagos or Rwanda, which we also dealt with. I hope the Minister will take that away when he comes to consider that debate. At the end of the day, we would not want to find that international agreements—which sometimes affect the citizens of this country even more than the primary legislation we consider—are being treated as a second-class citizen when it comes to parliamentary scrutiny.
I thank all noble Lords for their participation in this debate. I apologise for taking rather longer in this winding up than is usual. I beg to move.