India and Southeast Asia: Free Trade Agreements

Lord Bilimoria Excerpts

Thursday 6th March 2025 Lords Chamber

[Lord Bilimoria (CB)]

My Lords, the India I was brought up in as a child was an inward-looking, insular, protective economy with a low level of growth. Since 1991, India has emerged as the fastest-growing major economy in the world, an emerging global economic superpower, and the fifth-largest economy in the world, soon to be the third-largest economy in the world. I predict that, by 2060, it will be the largest economy in the world.

I have been privileged to be at the forefront of UK-India relations for 22 years as co-chair of the India-British partnership, a member of the UK-India roundtable, the founding chair of the UK India Business Council and, currently, co-chair of the India All-Party Parliamentary Group. I thank the noble Baroness, Lady Anelay, for leading this debate at this very important time.

India is only the UK’s 11th-largest trading partner, and yet it supports 600,000 jobs between both nations. The goal, of course, is that we get this to increase to over $100 billion of trade by 2030. We have been negotiating this free trade agreement since 2022, when I was president of the Confederation of British Industry, the CBI. Three years have gone by. The benefits of an FTA are lower trade costs for businesses, greater consumer choice, lower prices and the maintenance of standards.

There was a pause in negotiations because of the elections last year in both countries. There are sticking points. We all know about India and Scotch whisky. We know about the greater mobility that India would like for professionals and students—I am the co-chair of the All-Party Parliamentary Group for International Students. Why, I ask the Minister, can we not take international students out of the net migration figures? That would help so much. Of course, India wants faster visa processing and concessions on national insurance for temporary workers. Are the Government considering this seriously?

From the UK’s point of view, we would like access, including for cars, where the duties are very high in India, and for Scotch whisky, where the duty is 150%. It has been reduced from 150% to 100% for bourbon, and we would like Scotch whisky duty reduced to 30%, if that is possible. Then, of course, there are financial services. The total trade in goods and services between our countries grew by 10%, and is now at £42 billion.

The diaspora is the living bridge; its members include people like me. I am proud to be part of the largest ethnic-minority community in the UK—and the most successful by far, reaching the very top in every field, whether it is politics, business or any other area.

We have talked about trade, but there is also investment. If we look at the Grant Thornton India Meets India Tracker report, we see that there are almost 1,000 Indian companies in the UK, turning over £50 billion and employing over 100,000 people. There are 635 British companies in India, with a revenue of £51 billion and employing almost 700,000 people. The amount of, and potential for, collaboration on technology and innovation is huge. Security and defence are important in this uncertain world in which we live, yet, over the last decade, only 3% of India’s defence acquisitions came from the UK. As India seeks to advance its defence industry and diversify away from Russia, the British defence sector could emerge as a key collaborator on technology transfers and support India’s “Make in India” efforts.

Then there is India’s membership of the Quad. I have said for a long time that the UK can join the Quad; does the Minister agree that we could have Quad Plus? Of course, we are already members of AUKUS. The Indian Minister of External Affairs, Dr Jaishankar, is in the UK as I speak. At Chatham House yesterday, he said that he was “cautiously optimistic” about the UK-India free trade agreement negotiations and that he hoped that

“it doesn’t take that long”.

I say to the Minister: three Diwalis have gone by since we started these negotiations, so please let us set a deadline, let us not have the best being the enemy of the good and let us conclude this free trade agreement. Let us get it done.