India-UK Trade Negotiations

Jim Shannon Excerpts

Tuesday 22nd February 2022 Westminster Hall

[Bob Blackman]

My hon. Friend is a former Trade Minister who knows such things all too well. Those go hand in hand—it is no good having a free trade agreement if we do nothing with it. Indeed, before we get to the free trade agreement, we have to use the opportunities we have in the diaspora here and all the other opportunities for trade.

There is also a great opportunity in the digital sector. The Government of India aim to have a $1 trillion online economy by 2025. We expect internet penetration in India to hit 50%—or 622 million users—so the free trade agreement represents a huge opportunity for businesses in the UK, such as those in tech, artificial intelligence and cyber-security.

A trade agreement will not only build on our relationship but give young Indians the opportunity to come to this country to study—to get their degrees, master’s degrees and PhDs—and to return to India to use the knowledge that they have gained in friendship with the UK and to expand India’s economy even more. We already have excellent educational co-operation, in particular with our higher education facilities, but I want to see us do better. I want us to get back to the position where the UK is where India chooses to send its young people to for study. We have slipped behind in recent years, and myths have developed about caps on numbers. Those are problems to resolve—we know that—but nevertheless we want to return to the position whereby we are the place of choice.

Indian-owned businesses in the UK employ more than 95,000 people. Some 29,200 are employed in the west midlands alone—at least one west midlands MP, the right hon. Member for Walsall South (Valerie Vaz), is present—with 20,700 in London and 10,700 in Wales. Indian investment alone created 15,000 new jobs in the past three years. That demonstrates our opportunities to expand. Furthermore, India’s import requirements are set to be worth £1.38 trillion in 2035, which gives us an opportunity—if we can reduce the high tariff barriers—to utilise our capability to provide a high level of services and good-quality goods.

The tariffs paid on exports to India total £49 million a year. The tariffs for automotive manufacturers stand at 125%, so a trade agreement would obviously benefit them. In 2019, 9,900 UK businesses exported goods to India, 98% of which were small or medium-sized enterprises. That demonstrates that it is not only big companies but small companies that could gain.

We are a global leader on climate action, and the Government are obviously maintaining our high standards of environmental protection within trade agreements. An agreement with India could represent a huge opportunity for our world-leading renewable energy industry. The Government of India recognise the need to transition towards renewable gas and plan to install 175 GW of renewable energy capacity by the end of this year. Our expertise can help them to achieve that and to remove their dependence on coal and other fossil fuels. Although we already have a productive trading relationship, it would also help us to bounce back from the pandemic and to invigorate trade and investment services.

The reality is that our negotiation stance needs to be clear and above board, and we need to be clear that India was the UK’s 15th largest trading partner in 2020. As I have said, trade was worth £23.3 billion and our exports worth £8.5 billion in 2019. That makes India the 10th largest export destination for the UK. Outside of the EU, that clearly provides us with a huge opportunity. Imports were worth £14.8 billion in 2019, which was 2.1% of our imports, making India the UK’s fifth single largest import supplier. India is now the fifth largest economy in the world and the third biggest investor in the UK. We have slipped down the list on investment in India, and we need to put that right as we go forward. We were the third biggest investor in India, but I think we are now fifth or perhaps even sixth. India is the second most populous country in the world, with 1.38 billion people back in 2020, which amounts to 18% of the world’s population. I am throwing out a lot of stats, because we need to understand the huge benefit that can result from having a free trade agreement with India.

Obviously, under covid, both our economy and India’s economy contracted, but as they expand we will have an opportunity to get involved in further investment in India. At the moment, India is projected to overtake Germany and become the world’s fourth largest economy by 2030, and it could leapfrog Japan to become the third largest by 2050. The opportunity there is huge, and India has obviously been the engine of global growth over recent years, with its economy growing by 7% a year. If we could grow our economy by 7%,- wouldn’t we bite people’s hands off to achieve it? Clearly, that is going to be the position. I have mentioned India’s middle-class market, which is growing fast and which is a huge opportunity for us overall.

With a free trade agreement with India, we can obviously support jobs across the UK. If our exports to India grow, we can grow our businesses, and SMEs will grow as a direct result. In 2019, something like 1,000 Indian-owned local business units were operating in the UK, so clearly the opportunities are there and the demand for imported goods and services will grow as we use the living bridge between the United Kingdom and India.

Obviously, the success of exports to India will depend on how well the world economy goes and how our relationship grows with it. As I understand it, the second round of negotiations is due to take place between 7 March and 18 March, with a shared ambition to conclude negotiations by the end of this year. I wish those negotiations well, and I hope the Minister will be able to update us on the position when he responds to the debate.

Looking at the various parts of our economy, there are huge benefits right across the UK to having a trade agreement with India. One of our hugest exports is Scotch whisky. That has a huge impact. Those of our Scottish friends who are present—the hon. Members for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), for Glasgow East (David Linden) and for West Dunbartonshire (Martin Docherty-Hughes)—know that they will gain as a result of a global Britain free trade agreement. If they were to engage in foolish behaviour and leave the United Kingdom, they would lose that free trade agreement and once again face tariffs of 150%. Indeed, the export of Irish whiskey is a vital part of the Irish economy and will clearly be—

[Jim Shannon (Strangford) (DUP)]

Northern Irish!

[Bob Blackman]

I have had the opportunity of sampling Irish whiskey on many occasions.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Harrow East (Bob Blackman) for introducing the debate in a consistent, helpful way. I am pleased to follow the contributions of the hon. Members for Glasgow East (David Linden) and for West Dunbartonshire (Martin Docherty-Hughes). The hon. Member for West Dunbartonshire knows that I have supported him in the campaign that he has consistently been involved with over the years and in every one of his debates, and I support him here today in urging the Minister to do something. It may not be too late for that plea to the Minister and to the Government to do something to help the hon. Gentleman’s constituent, who has been very wrongly maligned, intimidated, tortured and injured, and his family.

Holding each other accountable to a higher standard is a hallmark of any good relationship. Ours with India should be no different, which is why what the hon. Gentleman said is so important. There has been colonial and historical contact, and that has drawn us together over the years. I see—we all see—India as a friend and the close relationship between the UK and India is well known. A long history of international co-operation and trade has been central to much of that. Our trading relationship is significant and, therefore, I believe we need to have a relationship that draws on our concerns in this country. I will lay out some reasons for that.

The UK is the third biggest investor in India, and in 2020 India became the second largest investor in the UK. Our relationship is growing from both sides and that is important. During the covid-19 pandemic, trade with India secured vital personal protective equipment for our frontline workers, and helped to secure the production and roll-out of the Oxford-AstraZeneca vaccine on such a mammoth scale. The history and our relationship over the last 100 years—especially over the last two—have been significant and important.

It goes without saying that the UK-India relationship is mutually beneficial, and that underscores why a trade deal with India is and should be such a priority. However, in trade negotiations we should not ignore the values central to a good relationship for the sake of a better trade deal. The close relationship between the two countries necessitates that our Government and our Ministers raise the issue of human rights concerns in negotiations with India. Will the Minister confirm that the issues are constantly raised with India? I am quite sure that the answer will be yes, but will the Minister confirm that in Hansard, so that we have it to refer to for the future?

I am sad and sorry to say this, but in recent years India has seen escalating violations of freedom of religion or belief. Churches and Christian schools were targeted during the Christmas season just past. Bibles were set on fire, services were disrupted, a statue of Jesus was torn down and the crowd shouted, “Death to missionaries”. Really? In this modern world? We have this relationship with India, but the Indian Government have not acted on those issues. In 2013, the Open Doors world watch list ranked India as 31st in the global list of the top 50 countries where Christians faced the highest level of persecution worldwide. Last month, in its latest world watch list, Open Doors ranked India in 10th position; it has risen from 31st to 10th. The research sounds the alarm on the escalation of freedom of religion or belief violations in the country—not just against Christians, but against other faiths and beliefs too. I will quickly speak of them.

Lynchings and hate speech targeting Muslims in India have repeatedly made headlines. In December last year, there were open calls for genocide against Muslims at a Hindu Mahasabha party conference. That should never happen at any Government conference or any party conference. The marginalisation of Muslim women was evidenced last month when schools and colleges in the Indian state of Karnataka banned the Muslim headscarf. Indeed, Malala Yousafzai has since responded to colleges forcing Muslim girls

“to choose between studies and the hijab”—

in short, to choose between their right to education and their right to freedom of religion or belief. That must stop. Can the Minister give some indication of how we are encouraging India to do just that?

[David Linden]

I am glad the hon. Gentleman has touched on that. I discussed the issue in a meeting with the Prime Minister. Thankfully, there was an undertaking that he would raise the issue. Does the hon. Gentleman agree and accept that a lot of the behaviour stems directly from Prime Minister Modi and the various thugs in his party who think that such behaviour and intolerance towards people of a different faith is somehow normal? We need to send a very strong message from London to the Indian Government that we will not accept such behaviour and that we will raise it during the negotiations.

[Jim Shannon]

I agree that there is an onus on Prime Minister Modi to speak out. Unfortunately, we have not seen much evidence of that. If he speaks out, there should be a reaction, and those who listen to him might respond in a positive fashion, but that has been lacking so far. However, I hope that we can have such a response.

I believe that there is hope and I want to reflect on that as well. Human rights provisions in international trade deals have become the norm since the early 1990s. More than 75% of the world’s Governments now participate in preferential trade agreements with human rights provisions, and we should participate as well. European Union international trade agreements include human rights clauses and a general obligation to uphold human rights as set out in the UN universal declaration of human rights, so what are we doing to make sure that that is upheld?

Leaving the European Union has enabled us—I say this with great respect to colleagues on my left-hand side, the hon. Members for Glasgow East and for West Dunbartonshire—to pursue an independent trade policy. It is vital, however, that we do not drop human rights provisions in that endeavour and that we appropriately use free trade agreements to pursue our broader international objectives.

The UK has a history of defending human rights across the world and is a leader in protecting the fundamental right of freedom of religion or belief. I recognise the good work that our Government have done on these issues, but there are occasions when we have to speak up in a gentle but firm fashion to say that things are not right. The right to freedom of religion or belief is a gateway right and a strong indicator of the future trajectory of the human rights landscape in a country. That is where the focus must be in India, so we seek that change. Religious or belief minorities are often the first groups to be targeted before other rights are eroded, so the right to freedom of religion or belief is well placed to be an indicator of human rights provision in a trade deal with India. I am confident that the Minister’s response will endorse our concerns and deal with how we can make things better.

I am mindful of the time, so I will conclude by urging the Government to ensure that human rights provisions are included in the text of future trade deals with India, that those provisions include robust monitoring and enforcement mechanisms, that the right to freedom of religion or belief is part of that framework, and that the Prime Minister of India takes the lead on this issue. If we hope to nurture a sincere relationship with India—I hope we do; I want us to—Government silence on the matter cannot be tolerated.