UK-India: Comprehensive Economic and Trade Agreement

Lord Kerr of Kinlochard Excerpts

Wednesday 4th March 2026 Grand Committee

[Lord Kerr of Kinlochard (CB)]

I shall save my panegyric on the noble and learned Lord, Lord Goldsmith, for 16 March. I had prepared several pages of panegyric, but he throttled me by reminding me that he has yet one more report prepared under his supervision to present to us.

It is a privilege to take part in the debate on this report. I particularly welcome the splendid attack on protectionism from the noble Lord, Lord Johnson, and the splendid panegyric on the EU from the noble Lord, Lord Frost. They were a great pleasure to hear. I welcome the report and, like the report, I welcome the treaty. It imports elements of stability and certainty into what has, from time to time, been quite a turbulent relationship and it makes, in the phrase of the noble Lord, Lord Johnson, some significant dents in the carapace. I agree with that and it is very good, but its title is a misnomer. It is absolutely not a comprehensive agreement, and the gaps are significant.

I find the absence of anything on investment protection particularly worrying. India is a paradigm case for ISDS. I remember that when the committee was thinking about the earlier report on the negotiating objectives back in 2022, we felt it would be well worth having a go at ISDS, but I do not know whether the negotiators did have a go. It seems to me that the India of today does not need to be as defensive on this sort of issue. India is big and powerful and should have more confidence in itself, which would point to me to a willingness to consider appropriate ISDS and certainly a degree of investment protection. That the bilateral treaty that we had was abrogated and nothing has replaced it seems very odd to me and a situation that should be put right.

The three big gaps highlighted in the report are serious too: the absence of anything on mutual recognition of qualifications; the absence of anything much on financial services; and the total absence of anything on legal services. The legal services one particularly surprises me. Think of Gandhi and Nehru: they were proud of their Inns of Court training and rightly strong in their criticism of past colonial protectionism, so it is very odd that their heirs are determined to keep the English Bar at bay. I do not really understand it. I hope that the Government mean what the Secretary of State said in the other place on 9 October when he said that the Government would go on working to fill all three gaps. It is in both sides’ interests that those gaps are filled. I agree with the attack on mercantilism from the noble Lord, Lord Johnson. It would help India as much as it would help our service exporters.

On 16 March, we will be talking about the accountability gap. I have a personal theory, with which I have bored the noble and learned Lord, Lord Goldsmith, down the years, that we, as a country, have disarmed our negotiators by making it impossible for them to use the argument, when a proposition is being rejected by the other side, that “You have to agree to our proposition because we will never get this ratified if you do not”. American negotiators use that argument all the time. They say, “Okay, you could be right, but we’d never get it through on the Hill”, and they mean it. As the noble Lord, Lord Frost, has been pointing out, EU negotiators can use that argument. They used to say, “You may say that, but we would never get it through the Council”. Now they can also say, “We’d never get it through the European Parliament”. I modestly point out that the change that so pleased the noble Lord, Lord Frost, came as a consequence of some work done by a convention under Valéry Giscard d’Estaing about 23 years ago.

The problem we have in making that sort of threat credible is that our scrutiny procedures are plainly so thin that the threat is not plausible now. Our negotiators cannot say that because the other side knows that our scrutiny is a pro forma formality because Whitehall prefers to treat Westminster, and certainly the House of Lords, as mushrooms. They keep us in the dark and they feed us with—I will not go on. There have been honourable exceptions: the noble Lord, Lord Johnson, was one and the noble Lord, Lord Grimstone, was another. I have to admit that my old department, the Foreign Office, has been resistant to the kinds of changes that those handling trade have been willing to contemplate. That is a shame and we should put it right.

I do not blame the negotiators for not delivering on their negotiating objectives. They did not do so, but the negotiating objectives were unrealistic, as the International Agreements Committee pointed out in 2022. We were sceptical that it could be done.

I was relieved that a row about visas did not break the agreement, because we thought it might well do so back then. I worry, however, that what we are now doing about visas—the changes in our immigration policy that the Home Secretary put in her White Paper—will, if they happen, certainly not be conducive to a deepening of the business relationship between India and the UK. I am thinking in particular of the lengthening of the period before one could seek indefinite leave to remain or citizenship and of the earnings rule applying to individuals, not households. One may therefore have to consider choosing between the family staying or the wife departing. That is no way to deepen a business relationship. I do not know if the Government are going to do that or make it retrospective, which would be even worse. We need to bear in mind that the relationship between the two countries is people based; if one lets visa policy prevent deepening that relationship, that would be a shame.