India-UK Trade Negotiations

Martin Docherty-Hughes Excerpts

Tuesday 22nd February 2022 Westminster Hall

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

It is good to see you in the Chair, Mr Davies. I thank the hon. Member for Harrow East (Bob Blackman) for securing this debate.

It has been interesting and, in many ways, encouraging to hear the enthusiasm that Members across the House have for increasing links with the Republic of India. While some from my party and my part of the world can only support increasing trade, commerce and understanding between democratic peoples, I am one of the few discordant voices in this debate. I have to ask whether that is truly appropriate at this moment, especially while my constituent, Jagtar Singh Johal, remains arbitrarily detained in a maximum security prison.

Having served as a member of the Defence Committee for five years, I am under no illusions as to the importance of maintaining good relations with India. It remains the largest democracy in a region where it can sometimes seem that anti-democratic voices have the upper hand. However, being a member of the Committee also meant I had more time than most to read last year’s integrated review and that I was fortunate enough to meet many of the people who wrote it.

The fine balance between interests and values is a major theme throughout the review and is something that we should continue to reflect on. On page 17, the review states:

“In the years ahead we will need to manage inevitable tensions and trade-offs: between our openness and the need to safeguard our people, economy and way of life through measures that increase our security and resilience; between competing and cooperating with other states, sometimes at the same time; and between our short-term commercial interests and our values.”

What about our Prime Minister? We know that he is, of course, a man of his word. In his introduction, he says that,

“By 2030, we will be deeply engaged in the Indo-Pacific as the European partner with the broadest, most integrated presence in support of mutually-beneficial trade, shared security and values.”

I would like to linger on the last word: values.

My constituent Jagtar Singh Johal was shopping with his newlywed wife in Jalandhar city on 4 November 2017 when he was suddenly assailed by persons in plain clothes who did not identify themselves. They bundled him into a van before speeding off, leaving his new wife distraught at the side of the road. It was not until he got to Bagha Purana police station that he realised those people were law enforcement. However, if that realisation made him think he would be dealt with humanely, he was wrong.

Jagtar alleges that from 5 to 9 November, the police interrogated and tortured him, including by means of electric shock to his genitalia, forcing his limbs into painful positions and depriving him of sleep. That torture is probably what contributed to Jagtar signing a confession and making a video confession that later appeared on prominent Indian news sites, both of which he subsequently retracted.

I have spoken about Jagtar’s case on many occasions in the House and I will continue to do so until he is released. Due to the time constraints we have today, we will have to gloss over almost five years in captivity, a move to a maximum security prison and the gradual realisation from all working on this case that we were dealing with arbitrary detention.

In my Westminster Hall debate last year on Jagtar’s case, I unfortunately did not hear any justification from the Foreign, Commonwealth and Development Office as to why it did not consider Jagtar’s detention to be arbitrary. However, I fully intend to make the FCDO justify that decision whenever I can. We should ask ourselves if we consider the treatment of Jagtar to be consistent with the pursuance of shared values in the UK’s foreign and trade policy.

My constant refrain during Jagtar’s detention has been for transparency, due process and the rule of law to be what the Republic of India is judged on by both the citizens of that mighty country and the FCDO. The integrated review quite clearly states that,

“we will increase our efforts to protect open societies and democratic values where they are being undermined”.

There is more than enough in this one case for me to ask all Members present, including the Minister, at what price do we pursue this deal? At what point is it incumbent on the UK as a state that seeks to protect open societies and democratic values to act when they are demonstrably not being adhered to? While it is, of course, for the people of the Republic of India to decide how they are governed, it is for us as democratically elected parliamentarians to decide how we sign free trade deals with them.

I hope I have made it clear that, although the benefits of free trade and cultural exchange are undeniable, they should not be pursued at any price. They should certainly not be placed above the wellbeing of individual UK citizens such as Jagtar Singh Johal.

--- Later in debate ---

[Gareth Thomas]

My hon. Friend makes an important point. That is why we need to ensure that there is no weakening of standards as Ministers, perhaps desperate to make up for the shortfalls in the trade and co-operation agreement with the EU, seek to rush to agree trade deals with other countries.

Ministers ought to be able to make fast progress on Scottish whisky tariffs. The Government of India are keen to tackle smuggling, counterfeiting and the loss of tax revenue, so the UK Government are pushing at an open door regarding Scotch whisky tariffs. The financial sector is emerging as a vibrant and dynamic area of growth in the Indian economy, but India ranks only 30th as an export destination for UK financial services. Figures suggest that Britain exported about £3.8 billion of services to India, with financial services making up less than 10% of that total.

An ambitious agreement on services could support and complement India’s economic development. Indeed, given the UK’s strong comparative advantage in high-value services such as digital finance, a deal that does not support real growth in services exports would be very disappointing. Again, on tech, the UK and India are among the world’s leaders in the development of new technologies. An FTA could help to develop business co-operation in advanced research and manufacturing capacity, in green energy capacity in particular, as well as in artificial intelligence.

For many small businesses, improving customs arrangements to reduce bureaucratic delays and red tape is key. An FTA should include reaffirming commitments to implement the WTO’s trade facilitation agreement, to ensure that there are commitments on the timely release of goods and express shipments, and a mutual recognition of authorised economic operator schemes. On the point of mutual recognition, a comprehensive and ambitious FTA, of the type promised by the Prime Minister, should also include progress on the mutual recognition of professional qualifications and more robust regulatory dialogues.

Trade agreements are not a zero-sum game; there are trade-offs. One reason why better scrutiny of trade deals is needed is to ensure that there is proper debate about those trade-offs and the context of trade deals being done—a point underlined by the hon. Member for Strangford. One obvious issue in that regard concerns visas. The Secretary of State confirmed that nothing is off the table, and a multiplicity of sources confirm India’s continuing interest, and indeed priority, in a substantial easing of visa restrictions into the UK.

[Martin Docherty-Hughes]

While the UK was a member of the European Union, it was the fly in the ointment of a trade deal with the Republic of India, over two specific issues: whisky tariffs, and the fact that the UK Government did not want a more liberal visa position. Is the reality that now they cannot get cheap labour from Europe, they are looking for even cheaper labour from India?

[Gareth Thomas]

The hon. Gentleman asks an important question. My hon. Friend the Member for Ealing, Southall underlined the concern we heard from many sources about the more illiberal regime on visas that was introduced by the previous Prime Minister. It is worth asking the Minister if he plans to allow, as under the Australia deal, a significant increase in access to the UK for Indian nationals. What will Britain’s ask be in return, regarding easier movement between the UK and India for UK professionals?

What is the Minister planning for ceramics? That is a key industry, which is hugely important in many specific parts of the UK, such as that of my right hon. Friend the Member for Walsall South, and which is facing ever-growing competition from India. To what extent is the Minister factoring into the negotiations the needs of the ceramics industry?

One of the criteria that the Opposition will use to judge the Secretary of State’s negotiating skills is the extent to which the deal boosts development, improves equality of opportunity, and tackles poverty. Just as we believe that every community in the UK should benefit from the trade deals that Britain signs, every community in India should benefit from a UK-India free trade agreement. That is why we want to see chapters on labour and human rights—important points underlined in interventions from the hon. Members for Strangford and for West Dunbartonshire. We welcome the opening of negotiations, but we will monitor their progress very carefully.

[The Parliamentary Under-Secretary of State for International Trade (Mr Ranil Jayawardena)]

It is a pleasure to serve under your chairmanship, Mr Davies. I thank my hon. Friend the Member for Harrow East (Bob Blackman) for raising this important topic and for sharing his passionate belief in the importance of closer ties between Britain and India. I also thank Members from across the House for their broad support for the notion of a trade agreement with India. Although we do not have much time left, I shall do what I can to cover as much as possible.

The Government fundamentally believe in the power of free trade and free markets as unrivalled forces for good in the world, which is why we are pulling out all the stops to champion this great cause globally. We are using free trade around the world to forge new bonds of prosperity with nations worldwide, unlocking fresh growth for businesses of all kinds and sizes based across our United Kingdom. We are positioning Britain at the heart of a rapidly changing global trading system, in which the greatest opportunities lie in emerging markets and the fast-growing economies of the east, and the free trade deals that we are signing with our partners are key to that endeavour.

As has been mentioned, we have already signed deals with 70 countries plus the EU, covering trade worth £772 billion in 2020, and there is more to come. We have already gone above and beyond existing EU agreements with some of the world’s most advanced economies, such as Japan, and we have secured new deals with Australia and New Zealand, but we are just getting started.

To witness the fantastic potential of the global Britain that we are building, we need look no further than the deal that we are discussing today: the free trade agreement that we are negotiating with India. This deal promises to be a game changer for our economic partnership with the world’s largest democracy, opening the door for British businesses to a vast and fast-diversifying market of almost 1.4 billion people—larger than the population of the EU and US combined. The deal is bringing us closer to an economic superpower that, despite covid, was worth more than £2 trillion in 2020 and is on course to become the world’s third largest domestic market by 2050. As the world’s spending power shifts eastward, giving global Britain a greater stake in the Indo-Pacific is crucial, because it is a part of the world that represents over 40% of global GDP and contains the growth of tomorrow.

As has already been said, Britain and India share a trade partnership that was worth almost £24 billion in 2019—energised, as my hon. Friend the Member for Harrow East says, by the living bridge of people and ideas that flow between our nations. We already share close business ties, including nearly half a million jobs across our economies, according to the Confederation of British Industry. Our financial markets are interconnected, with 35 Indian companies listed on the London stock exchange, and our firms partner one another in driving change across a range of fields, from finance to manufacturing, and from tech to transport.

There are innovative businesses such as the Indian firm Intas Pharmaceuticals, which has its headquarters in the constituency of the hon. Member for Harrow West (Gareth Thomas) and near that of my hon. Friend the Member for Harrow East. There are many other such businesses across London, but we know that our nations could and should be doing far more together. That is why we want to strengthen the partnership with India further and faster, building on the bedrock of shared values, common law, institutions and, as the hon. Member for Ealing, Southall (Mr Sharma) said, cricket.

[Martin Docherty-Hughes]

What do shared values mean, when a UK citizen born in this country—a full UK citizen with a full UK passport—can be arbitrarily detained by an ally?

[Mr Jayawardena]

I will address the points made by the hon. Gentleman and, indeed, by the hon. Member for Strangford (Jim Shannon) in a moment, but I want to make some progress on trade, which we are also here to discuss.

As part of the road map signed by both Prime Ministers last year, we have set the ambition of doubling our trade with India by 2030, as has been said. That provides a clear framework for our bilateral relationship in future. As part of the road map, we committed to deepening the economic relationship through an enhanced trade partnership, an ETP.

I was delighted to play a role in driving forward that partnership, which is already helping to increase opportunities for British businesses in India by tackling market access barriers, for example, allowing our apples to be imported into India once again—some say, for the first time in 50 years. The partnership has also secured improved access for British medical devices, as noted by Members; committed us to agreeing on mutual recognition of educational qualifications, as requested by the Labour Front Bencher, the hon. Member for Harrow West; and is exploring how we can increase our trade and co-operation in legal services, as raised by the SNP Front Bencher, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry).

Major restrictions such as high tariffs, however, still hold us back, so a free trade deal between Britain and India holds the key to unlocking our enormous untapped trading potential. An ambitious deal could bring huge economic benefits, boosting Britain’s GDP by up to £6 billion by 2035 and delivering a triple bonus of higher wages, lower prices and greater choice for British consumers. We could slash taxes on British exports, such as whisky, whether from Scotland, Northern Ireland, Wales or even England—

[Mr Jayawardena]

I will make some progress. Whisky and cars, from across our nation, face import duties of 150% and 125%, respectively, in the Indian market. A trade deal could give British businesses a first-mover advantage over American and European firms in India, positioning our exporters—as said by my hon. Friend the Member for Wyre Forest (Mark Garnier)—at the front of the queue to meet the expanding demand for world-class goods and services from India’s tens of millions of middle-class consumers.

Increasing trade-led growth could benefit Scotland by up to £220 million, Wales by more than £120 million and Northern Ireland by £70 million, while delivering tens of millions pounds-worth of growth across every English county, including counties in the west midlands, where a deal could bring a boost of up to £300 million, providing fresh opportunities for firms that do business with India, such as Aceleron Energy in Worcestershire and Fortress Security in Wolverhampton. Opening the door to further trade-led growth for firms in the south-east could see a boost to their collective economy of about £430 million in the long run. Such companies include manufacturer He-Man Dual Controls based in Hampshire—not in my constituency—and Larchfield Aerospace in Kent.

The trade deal has the potential to benefit SMEs, which account for 80% of British trade in goods to India in 2020. Smaller firms are disproportionately hindered by costly trade barriers and, as a result, they stand to benefit the most from a deal that cuts red tape and reduces administrative burdens.

Any agreement will be a future-facing deal, expanding the business we do with India in cutting-edge sectors that are shaping the global economy, pushing the boundaries of technological change from fintech to clean tech, automation and AI. As the world’s second-largest services exporter, Britain is perfectly placed to support Indian growth in those fields, taking our partnership in the industries to the next level.

None of that will alter this Government’s commitment to uphold British values. I said that I would address this point: we condemn any instances of discrimination of religion or belief, regardless of the country or faith involved. Where we have concerns, we raise them directly with the Government of a particular country, including the Government of India, at official and ministerial levels. That continues to be so in the case referred to by the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), which the Foreign Office has raised more than 70 times—

[Martin Docherty-Hughes]

rose—

[Mr Jayawardena]

I am afraid I do not have time today, but I am sure we can continue the discussion.

This deal will help to define the future for the global Britain that we are building. It will lay the foundation of our trade relationship with one of our strongest and most important global partners. It will place the world’s oldest democracy and the world’s biggest one side-by-side as we champion a world view that puts people first. It will shape how a modern, ambitious and truly global Britain is using the irresistible power of free trade to tear down barriers to growth.

Motion lapsed (Standing Order No. 10(6)).