India-UK Trade Negotiations

Debate between Martin Docherty-Hughes and Gareth Thomas

Tuesday 22nd February 2022 Westminster Hall

[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.