India and Southeast Asia: Free Trade Agreements

Baroness Anelay of St Johns Excerpts

Thursday 6th March 2025 Lords Chamber

Asked by

[Baroness Anelay of St Johns]

To ask His Majesty’s Government what progress they have made in securing free trade agreements with India and countries in Southeast Asia.

[Baroness Anelay of St Johns (Con)]

My Lords, trade is the bedrock on which successful economies are built. The UK’s withdrawal from the EU has given us the opportunity to pursue an independent trade policy, ratifying and implementing new trade agreements with other countries.

Last week, the Business Secretary said:

“Securing a trade deal with what is soon-to-be the third biggest economy in the world is a no-brainer, and a top priority for me and this Government”.


I welcome the Labour Government’s decision to resuscitate the free trade talks with India, which were initially launched four years ago by Boris Johnson and Narendra Modi—but we are not alone in the race to get a deal. The EU is also knocking on India’s door. Last month, Ursula von der Leyen visited Delhi and said that the EU and India were pushing to get a free trade agreement this year. Is that timeframe the same for the UK Government?

In a time of increasing global disruption, it is more important than ever to maximise our opportunities for international trade. There are both challenges and opportunities when negotiating trade agreements—of course, there always are. The trade talks begun by Boris Johnson were not concluded by the time of the general election last year. The BBC and newspaper reports suggested then that the sticking points included high tariffs in India on Scotch whiskey and relaxing fees and visa rules for Indian students and professionals coming to the UK. India was also reported as requesting an exemption from the UK’s planned carbon border adjustment mechanism. Do the Government plan to make concessions on all those issues? Do they have any red lines? If so, would they include the protection of sanitary and phytosanitary standards?

An FTA with India could indeed offer the UK both economic and geopolitical advantages, and give us better positioning in one of the most economically dynamic regions of the world. The wider geopolitical considerations could bring greater collaboration on issues such as security and climate change—matters that are in our minds every day in this House.

If tariffs and trade barriers were reduced, or indeed eliminated, UK companies could reach Indian consumers at more competitive prices, particularly perhaps in sectors such as technology, machinery, pharmaceuticals and financial services. The UK has a strong tech industry, about which we have just heard in the previous debate, and India has a large and growing demand for technology, engineering and digital services.

India’s expanding middle class creates more demand for a variety of products and services. The UK could tap into this growth, especially in consumer goods, education and healthcare sectors. India is a significant player in global supply chains, especially for sectors such as IT, textiles and pharmaceuticals. An FTA could improve collaboration between UK and Indian companies, creating far more efficient supply chains, and of course reducing costs thereby.

However, there are obstacles, stemming from economic and political challenges, which require careful consideration. For example, how do the Government plan to overcome the complexity and risks in resolving the difference in regulatory standards, particularly in industries such as pharmaceuticals, food safety and digital services? I am sure we all recall that India’s approach to intellectual property protection, particularly in the fields of pharmaceuticals and software, is far less stringent than in the UK. Seeking improved access for UK agricultural exports could meet resistance from domestic producers and stakeholders in India, who are currently heavily subsidised.

There is also the significant matter of human rights standards in India. We have heard much of that earlier today, and quite right too, because in two days’ time it is International Women’s Day. The FCDO’s most recent annual report on human rights refers several times to the human rights abuses in India, particularly of women, marginalised groups and religious minorities. Can the Minister give a commitment that, when the Government negotiate with the Indian Government for a trade agreement, it will include discussions on human rights? In particular, will they raise the importance of protecting women’s sexual and reproductive health and rights?

I would like to refer briefly to Indonesia. It has become one of the world’s major emerging economies. Members of this House and another place used their February Recess to go on a British Group Inter-Parliamentary Union visit to Indonesia to learn more about its governance and economy, and the impact of UK soft power. They were impressed by the establishment there of the Deakin University Lancaster University Indonesia, which provides high-quality business and tech education. It means that Indonesian students can gain degrees there which are not only accredited by a UK university—Lancaster—but accepted by the Indonesian Government as being equal to a sarjana degree from a local Indonesian university. It is the very first international joint campus of its kind. Does the Minister agree that innovative work, such as that by Lancaster University, is to be welcomed and enhances the UK’s soft power?

In conclusion, I certainly hope that a trade agreement with India could be highly advantageous to the UK. It could increase market access, trade diversification and services expansion, and strengthen our geopolitical relationships. That would, I hope, contribute to long-term economic growth and strategic influence. I hope that closer involvement in soft power ventures in Indonesia could raise the profile and expertise of the UK there.

Both India and Indonesia, together with China, are members of the BRICS intergovernmental organisation. In trade, we know that the economic heft of China casts a shadow over all negotiations. Securing FTAs and other trade agreements in India and south-east Asia is not an easy task; I recognise that. I look forward to hearing from the Minister, now and in the future, on what progress the Government are able to make.