UK-India Free Trade Agreement

Andrew Griffith Excerpts

Monday 9th February 2026 Commons Chamber

[Andrew Griffith (Arundel and South Downs) (Con)]

I am delighted to see not just the excellent Minister for Trade, but the Secretary of State. [Interruption.] I did; just bank the win. I read that the Secretary of State is being earmarked as a caretaker Prime Minister, so we are pleased that he has the time to spend with us—I think we have 10 minutes before Labour colleagues have to run upstairs.

Richard Cobden said:

“I believe that Free Trade will do more to civilise the world than all the treaties of peace that have ever been signed.”

He was the former Member of Parliament for Stockport, but he was a resident in my own West Sussex constituency, near Midhurst. His advocacy of free trade, including in this House, was always about its benefits for ordinary people: cheaper food, higher wages and fewer incentives for people to wage destructive wars that had a huge impact on ordinary people.

We Conservatives agree. Those on the Conservative Benches will always be the party of free trade, where it benefits our country. That is why it was a Conservative Government who signed new landmark trade agreements with the EU, Japan, Australia and New Zealand, and negotiated the entry of the UK to the comprehensive and progressive agreement for trans-Pacific partnership. It is why it was the Conservative Government who laid the foundations for this free trade agreement with India. And let us be absolutely clear: this agreement is a tangible benefit of the decision the British people made in 2016 to leave the political institution of Europe; the fruit of the independent trade policy we regained, allowing the United Kingdom to negotiate once again as a sovereign state, just like Canada, Australia and Switzerland —Britain first, not Britain hoping against experience that its interests would float to the top of a soup of 27 other conflicting flavours.

Since July 2024, the Indian economy has grown by 11%. For context, the European Union has grown by 1.9% in the same period. Under this Government, the British economy has grown by just 1.6%. Exports matter, so this deal has the potential to be a key part of a growth plan for our economy. However, as any business leader will tell us, the devil is not just in the detail of such deals, but in what is not in them. I welcome the excellent report by the Business and Trade Committee, which is very thorough and an important part of the scrutiny process of this House.

We are a nation for which services represent nearly half of our global exports. I am afraid it appears that the Government have accepted a deal that is disappointingly thin on the sectors where Britain leads the world. The inclusion of services in this deal was the No. 1 priority of the previous Government’s negotiations. Instead, this deal settles for locking in existing levels of liberalisation—all good—rather than breaking new ground on services. There is an absence of provisions for mobility to allow our service industries to really integrate in India, restricting our consultants, engineers and architects from practising on the ground.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

Will my hon. Friend reflect on the view, which I hear a good deal in a constituency, which contains very many entrepreneurs both of Indian heritage and with connections to business in India, that this deal shows a Government who are not listening to the voice of business that has that level of experience, because they are missing out, as he is describing, on so many of the opportunities that those existing business links contain.

[Andrew Griffith]

Well, I was going to be generous to the Government and say something slightly positive. My hon. Friend is absolutely right that Governments of all flavours could do an infinitely better job of listening to businesses. They are the people at the frontline in the real world. His constituents have very deep links to the economy of India and it represents a real opportunity. We support the deal, but the only tone today is one of slight regret about the missed opportunities. Of course, it is easy for a Government to get a deal if they take the deal being offered, rather than negotiating and seeking to improve that deal. Therein is some of the difference between the approach of our Government and—[Interruption.] Well, we did not get it because we were not willing to take the deal that was on the table. We were holding out and negotiating for a better deal.

Let me give the Minister an example of that—a quite surprising example, in many ways—which is the complete omission of a legal services sector deal from this agreement. The Law Society called that

“a missed opportunity for a significant breakthrough”.

The chair of the Bar Council said it was

“a once-in-a-lifetime opportunity”

missed. How ironic that a Government of lawyers, led by lawyers and stuffed full of lawyers, could not get even that aspect of the agreement across the line. The deal places a 36-month target—I hope it is a target, not an aspiration or ambition—for the conclusion of a mutual recognition of a professional qualifications agreement. That would be a great opportunity. Our services sector would welcome that, but I hope the Minister will agree with me that not to achieve that now would be to snatch defeat from the jaws of victory. It would be a humiliation for this Government and I hope he will address, when he winds-up, the precise plans to secure that agreement.

In a similar vein, the bilateral investment treaty that was planned to be agreed at the same time—it was in the original objectives for our deal—has also not been delivered. This is the deal that was offered, rather than the deal that could have been negotiated and improved. That leaves British investors exposed to sudden policy changes, unfair treatment and expropriation. I could, of course, be talking about the policies of this Government, but in this case I am talking about the Indian Government and the jeopardy for some significant British investors. Again, this is another missed opportunity—a deal that we support but that could have been better. I understand that the chief negotiator on the deal has confirmed that, sadly, there are no plans to return to the table to get an investment treaty across the line, but I would be very happy to stand corrected on that. Perhaps that point could be addressed in the Minister’s winding-up speech.

As we heard from the Minister, on day one the deal will grant Indian exporters of such wonders as textiles, gems and engineering goods immediate duty-free access to the British market. This is a welcome deflationary measure. It will come as good news for households as the price of goods in their weekly shops fall. Leather shoes, clothes, home furnishings and more will be cheaper under this deal. However, it is disappointing that this welcome reduction in tariffs is very far from symmetrical. Indian exporters benefit immediately, while British exporters sit in the waiting room. Scottish whisky producers, whom we have heard about, manufacturers of electric vehicles, the medical consumables industry and chemical producers will have to wait for between five and 10 years before tariffs are fully reduced.

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

The hon. Gentleman briefly mentions whisky. The deal is broadly welcomed by the Scottish whisky sector and I have welcomed it myself as an MP for a constituency with 49 distilleries—I am trying to visit them all. He talks about asymmetry in the deal, but is there not asymmetry in Labour Government policy, between the export deal, where they are trying to get the best possible deal for whisky, while whisky is still paying the highest levels of duty for alcohol in the UK? That is putting undue pressure on a sector that is already under pressure.

[Andrew Griffith]

The hon. Gentleman makes an important point. I do not want to simply agree with him for the sake of it: it is not easy for Chancellors of whatever flavour to balance the books, but where we have wonderful industries such as all our drinks and spirits industries, including, if I may say so, our English wine industry, the Government must do everything they can to promote them—

[Chris Bryant]

And Welsh.

[Andrew Griffith]

And Welsh, and from other parts of this wonderful kingdom.

This Government, as the previous Government, have by and large got the importance of the wonderful Scottish whisky industry, but it is important to do anything that can be done to help. Of course, the way that one reduces taxes over time is by making tough decisions on Government spending, which would be one of the key things the Conservatives would do in order to be able to lower those taxes.

The hon. Member for Stoke-on-Trent Central (Gareth Snell), who is no longer in his place, made an important point about the protection of ceramics and related industries, such as our brick and energy-intensive chemicals industries, which are all important. A trade deal, however wonderful it may or may not be, will do nothing to help the ruinously high energy costs faced by the ceramics, brick and chemicals industries, along with so many others. This debate is not about that issue and it is not the responsibility of the Minister, but it is nevertheless an important factor; if we are going to lower barriers and frictions so that we can boost trade, increase the prosperity of our citizens and grow our economy, that absolutely must involve the full stack, including energy and what one does about employment law and regulation.

[Sir Julian Lewis (New Forest East) (Con)]

I hope I am not stretching the boundaries of the debate excessively, but I would be interested to know whether the agreement has any implications for defence exports to India and, if it does, what safeguards would be in place, given the unhealthily close relationship between India and Russia.

[Andrew Griffith]

The document produced by the Select Committee lays out the impact for defence, modest as I believe it is. I will leave it to those on the Government Front Bench to answer my right hon. Friend’s important question about security—

[Chris Bryant]

rose—

[Andrew Griffith]

I will happily give way to the Minister.

[Chris Bryant]

I wonder if I could talk through the hon. Member for Arundel and South Downs (Andrew Griffith) to the right hon. Member for New Forest East (Sir Julian Lewis): our export control system for any exports from the UK into any other country in the world bears in mind diversion from one country to another. That is a very important part of what we look at. The FTA does not affect that process at all.

[Andrew Griffith]

I hope that my right hon. Friend is reassured to a degree by the Minister’s response. I will move on now—you will be pleased to know, Madam Deputy Speaker, that my speech is not as comprehensive as the work of the Select Committee.

I would be grateful if the Government could clarify a few points about the position on food and agricultural products. There are protections for sugar, chicken, eggs and pork, and that has been welcomed by producers. However, there are concerns from the British dairy industry about opening the market, which describes the deal as a one-way street: dairy is excluded from UK exports to India, yet tariffs on Indian dairy coming into the UK are removed.

[Chris Bryant]

I will try to keep up as we are going along, if that is okay. On dairy, I understand the point the hon. Gentleman is making; it has been made to me before and was also made in Committee. However, I am not aware of any Indian cheese company that has been able to export into the UK, as it would still need a licence. We were very keen to secure arrangements so that we were not abandoning any of our food standards, which obviously have to be met before any export can come here.

[Andrew Griffith]

I will try to leave the Minister with a short list of questions, rather than going through each and every one as we go.

Notwithstanding what the Minister has just said—perhaps we can revert to this later—there are also concerns about the Government’s hypocrisy in respect of pesticides and animal welfare, particularly with regard to crustaceans. I do not know whether the Minister has quite the same degree of expertise in crustacean welfare and in particular prawn eyestalk ablation, which sounds more trivial here than it would to the prawn whose eyestalks are being ablated. Those concerns are particularly relevant because despite the Government publishing and vaunting their virtue in terms of animal welfare, these poor blinded prawns seem to be victims under this deal. [Interruption.] I would be happy to give way to the Minister on prawn eyestalk ablation, which is an important point; perhaps, on winding up, he could make a more general point on trade deals and how the Government will protect our animal welfare and food safety standards.

[Mike Martin (Tunbridge Wells) (LD)]

Do prawns feel pain?

[Andrew Griffith]

I am in no way qualified to answer that. However, it is the Government’s position about crustacean welfare, and they should speak to it. Just before Christmas, they published a significant proposal to change the law on that. As ever in trade, this is not a point about the underlying fundamentals, on which the Minister will be advised by Government scientists and others—I did part of his job as Minister for Exports; it is a point about the symmetry and balance of the issue.

[David Simmonds]

My hon. Friend will recall that during the debates about post-Brexit trade agreements, the highest possible standards of animal welfare were raised frequently across the House on a cross-party basis. The matter my hon. Friend is talking about involves swapping prawns and other types of seafood caught in British waters to the highest possible standards with creatures reared using a method that involves pulling off their eyeballs while they are alive in order for them to lay more eggs so that more prawns can be produced more cheaply. I am sure we would all agree that is cruel and would not meet the expectations set out across the House. Does my hon. Friend agree that it is a powerful point that illustrates the asymmetry in this deal, which he is quite rightly seeking to criticise?

[Andrew Griffith]

My hon. Friend puts the point in a better and more informed way than me. It is important, and it is for the Government to set out very clearly how they propose to maintain or create a level playing field on these matters so that producers operating here to British standards are not disadvantaged, while we all get the benefits of trade and prosperity that I spoke of.

[Chris Bryant]

rose—

--- Later in debate ---

[Andrew Griffith]

I will defer to the Minister on prawn eyestalk ablation.

[Chris Bryant]

We are all joking about it, but this is a serious matter. The centre of the point is that whatever the tariffs may do, companies can only sell products in the UK that meet our food standards—precisely the point made by the hon. Member for Ruislip, Northwood and Pinner (David Simmonds). In order to ensure that is true, companies have to have a licence to sell in the UK. In addition, all Indian aquaculture products are currently subject to intensified controls with 50% consignment checks at the border. This is one of the many areas where we need to ensure that we protect our producers in this country, who are abiding by very high standards. I could apply that to all the different agriculture and foods that we are talking about, as well as to aquaculture.

[Andrew Griffith]

I thank the Minister for that intervention; I drew some comfort from it, but we will have to see the detail of the exact crustacean protections we end up with.

Finally, there is one glaring area that—even beyond the missing benefits to our important services industry—was a point of difference in the negotiations that we conducted and a reason why, when we were in government, we did not consummate that deal and why the negotiations remained outstanding. The Leader of the Opposition has been very clear about this: when she was leading the negotiations, she refused to sign this deal because of the double contributions convention. The Minister will know precisely what I mean by that.

We still have not seen the detail of that convention, and every Member of the House should be concerned. This is a very limited part of the process of scrutiny of trade deals—the rights of Parliament are perhaps not fully discharged just by the CRaG process. However, we have not even seen what the Minister referred to earlier as the HMRC agreement on this. What it means in substance—I will choose my words very precisely—is that Indian workers who come here to work will not pay a penny in British national insurance contributions, and neither will their employers.

The Government decided that they would open this deal—this two-tier tax system for India—at precisely the same time as hiking their jobs tax on every single British worker. I am happy to be rebutted or corrected, but by my calculations, under this agreement it could be up to £10,000 a year cheaper to hire a software developer on an average British salary from India than to hire someone from Britain for the same role, as employers will not be liable for those national insurance contributions. These are big numbers, and this will mean a big disadvantage to hiring an identical British worker at a time when there are 9 million people of working age not in work and when unemployment is rising—in fact, it has risen every month under this Government.

[Sir Ashley Fox (Bridgwater) (Con)]

Does this not suggest that when a deal was presented to the then Conservative Secretary of State for Business and Trade, she declined to sign it because she judged it not in the British interest? It does rather seem as though this Government have rolled over on this key point, which will allow Indian firms to import Indian workers in preference to British ones.

--- Later in debate ---

[Andrew Griffith]

My hon. Friend makes exactly the right point. The former Secretary of State—the current Leader of the Opposition—has been very clear that that was a deal breaker. It was deal or no deal, and if that had been an absolute red line, we would not have signed this deal. It is not a virtue to take any deal that is offered. As I say, the Conservatives are in favour of trade, and we value our relationship with India, but we would not have crossed that red line.

[Iqbal Mohamed]

Does the right hon. Member agree that anybody who comes to our country and does not pay into the system through national insurance and taxes should not be allowed to benefit from services that taxpayers fund, like the NHS, education, GPs, dentists and so on? It is a two-tier system if we are treating our care workers and healthcare professionals who come here on official visas differently from imported labour.

[Andrew Griffith]

I am glad to hear agreement across the House on the desire not to have a two-tier system. We all understand the need to pay our taxes to support our public services, but it will not feel right if two people are sitting cheek by jowl, side by side in the same place of employment—a factory or other work environment—but are contributing at a very different rate to the Exchequer for the public services that we all support.

[Chris Bryant]

Will the hon. Member give way?

[Andrew Griffith]

Let me finish my point, and then there will be plenty of opportunity for interventions. I will not anticipate the Minister’s point, but there are other agreements such as this in place—I want to be full and clear about that.

There are social security agreements where contributions are both paid in and taken out. We have them with the European Union, for example. They are a long-standing feature, and they were under previous Governments. Again, to be very clear and open, we also have a limited number of agreements like this with some selected other countries, including the high-skilled economies of Japan, South Korea and Chile and, to some degree, Canada. But we do not have an agreement like this of any sort with a mostly English-speaking nation of 1.5 billion people, all of whom would potentially be better off availing themselves of this arbitrage—this two-tier system—under this deal.

Astonishingly, this part of the deal was left out of UK Government communications, so not only do we have two-tier substance in terms of the economics of the deal; we also have two-tier communications. The Indian Government boasted about this element as a significant and attractive feature of the deal, but there was not a single mention of it in the UK Government communications. That, in and of itself, should send alarm bells ringing about this two-tier tax deal.

[Chris Bryant]

I was not going to make the point that the hon. Member went on to make—that his Government signed up to lots of similar arrangements—but I was going to respond to the intervention from the hon. Member for Dewsbury and Batley (Iqbal Mohamed). It is important that we make it clear that under the double contributions convention, a detached Indian worker and their employer in the UK would need to pay into the Indian provident fund. On top of that, they will need to pay £3,105 in NHS surcharges, and up to £769 in visa fees. On top of that, the employer would pay an immigration skills charge of £3,000, and £525 to issue a certificate of sponsorship, so I do not think that the numbers add up in the way that the hon. Member for Dewsbury and Batley was suggesting.

[Madam Deputy Speaker (Caroline Nokes)]

Order. The shadow Secretary of State has already spoken for longer than the Minister, which must be something of a record. I appreciate that there have been a lot of interventions on the shadow Secretary of State from Government Front Benchers, but perhaps he can draw his remarks to a close. The Minister will have ample time to make his points in the wind-up.

[Andrew Griffith]

I shall take good heed of those comments, Madam Deputy Speaker.

We support having a sovereign trade policy, and this is an excellent example of where it could have advantages. We are talking about one of the largest economies on the planet, which is growing approximately five times faster than the European Union. However, the deal could have been better. We are passionate about supporting our investors, lawyers, engineers, scientists and the wonderful services industry. We believe that they can compete anywhere in the world, provided that the field is level and the rules are fair, but we did not need to get a “good enough” deal across the line. British businesses needed something with a really good kick in it to get this country growing. Instead of a vindaloo of a deal, the Prime Minister came back with a bag of soggy poppadoms.

--- Later in debate ---

[Charlie Maynard]

The National Bureau of Economic Research, in the United States.

[Andrew Griffith]

But you don’t like the States.

[Charlie Maynard]

I certainly like the States.

While we are making comparisons with Europe, I note that under the UK’s free trade agreement 92% of our exports to India will enter tariff-free. Under the EU’s deal, 96.6% of its exports can enter India tariff-free. Perhaps there is some logic, after all, to bigger trade blocs having more leverage. I wholeheartedly agree with the comments from the hon. Member for Arundel and South Downs (Andrew Griffith) about national insurance contributions. I am also deeply concerned about that, as is my party. I also take the Minister’s point about visa fees and everything else, but by the time we add all those together, I think that UK Inc—whether in my constituency of Witney or across the UK—will still be at a major disadvantage. This risks undermining British labour—