UK-India Free Trade Agreement

Harriett Baldwin Excerpts

Monday 9th February 2026 Commons Chamber

[Dame Harriett Baldwin (West Worcestershire) (Con)]

Soggy poppadoms, buses, a lot of whisky, pottery, bricks, some Galloway cheddar and even an aircraft carrier promoting whisky—those are some of the colourful items mentioned in this debate, which brings to life the impact across all our constituencies of this UK-India comprehensive economic and trade agreement. As such, it is a pleasure to close today’s debate on the UK-India comprehensive economic and trade agreement. This debate forms part of the process of constitutional reform and governance that Parliament has adopted, whereby we spend 21 sitting days scrutinising agreements such as this one.

Despite the fact that other things happening in this building this evening have perhaps distracted the attention of some Members, particularly those on the Government Benches, we have heard that this agreement carries a lot of significance. In particular, I draw attention to the excellent and detailed speech made by my hon. Friend the Member for Weald of Kent (Katie Lam); she highlighted some of the economic incentives this agreement will create when it comes to employing British people versus Indian people to do the same jobs here in the UK. When the Minister responds to the debate, I would be interested to hear him answer those points. My hon. Friend the Member for Dumfries and Galloway (John Cooper) also raised an important issue about dairy. As I understand it, there are currently no licences for dairy products coming into the UK from India, but that could change in the future, so it would be interesting to know what process the Government would adopt to address that.

As my hon. Friend the Member for Arundel and South Downs (Andrew Griffith) said in his opening speech, free trade is a key belief among Conservative Members. That is why we pursued trade agreements with the EU, Japan, New Zealand, Norway, Iceland and Liechtenstein, as well as the comprehensive and progressive agreement for trans-Pacific partnership. Indeed, it was predecessors in the previous Government who laid the groundwork for the agreement that is before us today. As has rightly been acknowledged in many speeches this evening, this agreement represents a Brexit dividend—the ability to pursue an independent trade policy and to deepen our relationship with one of the world’s fastest-growing economies.

However, recognising that achievement does not mean we can ignore the areas in which this agreement falls short. Many of those points were raised by other Members in this debate. The Chair of the Business and Trade Committee, the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), made the point that the Government risk undermining the benefits of the agreement through their planned 40% cuts in UK export support staff. I invite the Minister to once again reconfirm to the House that those cuts do not include staff in India who will be working on the implementation of this deal.

The House of Lords’ International Agreements Committee report highlights the stark disparity between goods and services in this agreement. For a country whose economy is so overwhelmingly services-based, that imbalance matters. The agreement contains no meaningful advance on mutual recognition of qualifications; the deal establishes a 36-month target for reaching a conclusion in that area, but what will happen if no agreement is reached within that 36-month period? As my hon. Friend the Member for Arundel and South Downs highlighted, the sequencing of market access is deeply asymmetric, with many Indian exporters gaining from immediate tariff reductions in this country while UK exporters face phased access and quotas. A striking omission is that of legal services, as the House of Lords’ International Agreements Committee has said:

“We view this as a missed opportunity given that legal services comprise a strategically important and growing sector of trade, both in their own terms and in relation to supporting trade in other sectors.”

As others have noted, another concerning omission is the absence of any investment protection. The bilaterial investment treaty that was expected to be agreed at the same time as this deal remains undelivered, so can the Minister confirm for UK firms investing in India what his plans and deadline are for implementing an agreement along those lines? When we compare this agreement with the EU-India free trade agreement, the contrast is quite clear; the EU managed to achieve a full investment protection agreement, and its investors will have stronger legal certainty than their UK competitors. On agricultural products, my hon. Friend the Member for Dumfries and Galloway was absolutely right to highlight farmers’ concerns about dairy being an issue in the future. I invite the Minister to offer farmers up and down this country the assurances they need about the effect that these provisions might have on them in the future.

Finally, we must again address the double contribution convention. We do not know very much detail about it, but we do know that Indian workers posted to the UK will pay no national insurance, and nor will their employers. At a time when British businesses are being asked to shoulder increased national insurance contributions, it is hard to see how Ministers can defend a framework that makes it cheaper to hire from abroad than to employ a worker here at home. Can the Minister explain why the Government have created a two-tier tax system in which British businesses pay more in national insurance while employers hiring workers from India pay nothing at all, and what will he do if he sees British workers losing out in large numbers when this measure comes into force?

In conclusion, this deal is a welcome opportunity for British exporters to explore new markets, but one with many missed opportunities in areas where the UK should be leading, not lagging. The task now is to ensure that this agreement becomes a foundation and not a ceiling, so will the Government treat it as a living agreement? Will they return to the negotiating table and deliver the services access, investment protections and sectoral safeguards that British businesses and workers deserve, and what metrics and milestones can we in Parliament use to continue to hold the Government to account as they implement this agreement?