India-UK Trade Negotiations

Theresa Villiers Excerpts

Tuesday 22nd February 2022 Westminster Hall

[Bob Blackman (Harrow East) (Con)]

I beg to move,

That this House has considered India and UK trade negotiations.

It is a pleasure to serve under your chairmanship, Mr Davies, I think for the first time. I thank the Backbench Business Committee, on which I sit, and Madam Deputy Speaker for allowing us to have this very important debate. I declare my interest as co-chairman of the Indo-British all-party parliamentary group—the other co-chairman, the hon. Member for Ealing, Southall (Mr Sharma), is also present. This is an important time: trade talks between the UK and India have already begun. There is a tremendous opportunity, which I will go into in some detail.

Of course, we have the opportunity to negotiate a trade deal with India—our friends—because we have left the European Union; we now trade and negotiate as a free trading nation. We must embrace the opportunities that that gives us. Colleagues from across the House will, no doubt, also go into the detail of those opportunities, including in services, particularly for the City of London, legal services—India, after all, has the same basic legal system as we have—manufacturing, and Scotch whiskies and Irish whiskeys, which face huge tariff barriers in India at the moment. Those must form part of our successful negotiations.

We have this opportunity because we have a long-term friendship with India. The European Union has been trying to do a deal with India since 1997, but without success. The United States of America has been trying to do a deal with India, but without success. We should therefore not underestimate the difficulties that we may face. Over the weekend we had the good news that our potential membership of the comprehensive and progressive agreement for trans-Pacific partnership, which is worth trillions of pounds, is moving forward. The trade opportunities with India are enormous, and clearly a free trade agreement will support the Government’s strategy of developing the status of the United Kingdom—global Britain—as an independent trading nation.

We are seeking trade and investment opportunities. We champion free trade—I am sure that my hon. Friend the Minister will allude to that particular issue in his speech. We have already negotiated a long-term arrangement with India—co-operation has been taking place over the last year—but now, free trade is the key to our success.

India is a dynamic, fast-growing economy at the heart of the Indo-Pacific region. Our bilateral trading relationship is already quite significant, and we should not underestimate that—£23.3 billion in 2019. A free trade agreement could strengthen that, and could potentially increase exports by £16.7 billion by 2035. That is a goal that we must secure. We can also enhance the already existing trading relationships, which are considerable, and give the UK access to a market with long and short-term benefits. A free trade agreement has to work not only for the United Kingdom but, obviously, for India.

[Theresa Villiers (Chipping Barnet) (Con)]

Does my hon. Friend agree that one of the significant benefits of a free trade agreement between India and the United Kingdom is access to a market that is increasingly prosperous? Over recent years, millions of people in India have been lifted out of poverty because of economic growth and prosperity. That is fantastic news for India, and it also creates a great opportunity for businesses based in the UK to increase their trading with India.

[Bob Blackman]

I thank my right hon. Friend for her intervention. India has a young population, full of entrepreneurs and people who want to succeed, and with a growing and establishing middle class and, indeed, upper class. The potential for a wide range of exports gives us many opportunities to draw on for the overall benefit of this country.

UK consumers, producers and businesses will all gain from a free trade agreement. We must maintain our high environmental standards on labour, food safety and animal welfare in any free trade agreement, not just with India but across all our different agreements. It is also important to protect the NHS when we negotiate, as we do not want it to be compromised in any shape or form. We want to secure the best possible agreement, and the potential interim agreement could deliver early benefits. I look forward to the Minister alluding to that agreement, as well as to the strategic opportunities I have mentioned.

We share a common set of values. India is the world’s largest democracy and has long maintained its support for international co-operation and democratic Government. As my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) said, there have been huge advances over the past few years in the economy of India, the rights of Indians to work, and for villages across India to gain benefits from its trading position.

We work together in various multilateral fora, including the United Nations, the World Trade Organisation and the Commonwealth. In May 2021 we committed to an enhanced trade partnership, which could double trade by 2030, strengthening our relationship and invigorating our respective economies. That is part of a 2030 road map that covers the full spectrum of our relationship with India.

We have strong cultural links. Some 1.5 million British nationals are of Indian origin. I see one or two here in the Chamber, which demonstrates the role that the British Indian population plays. We support over half a million jobs in each other’s economies, so an agreement would further develop that deep-seated relationship. It would also help put global Britain at the heart of the Indo-Pacific region—one of our key strategies—which now represents 40% of global GDP and has most of the world’s fastest growing economies. As they expand, it is key that we have access to their markets.

An agreement with India would complement our other commitments, such as those to Australia and New Zealand, and the ongoing negotiations with the other 11 members of the CPTPP. Tilting towards the Indo-Pacific would diversify UK trade, make our supply chains more resilient and make us less vulnerable—particularly on a day like today—to political and economic shocks around the globe. It would also cement our position as a world leader in free trade and strengthen democracies around the world, which can only be a gain for India and for us.

I will not go through the many benefits of free trade agreements, as I know a number of hon. Members want to contribute to the debate. But let us be clear: reducing barriers will make trade easier and cheaper for UK exporters, as well as improve choice for UK consumers.

In 2019, India imported £5.35 billion-worth of goods from the UK, of which £5.24 billion was in lines subject to tariffs. That gives a feel for how much opportunity exists. Removing those tariffs would enable us to double our exports to India. India’s middle class, which I mentioned earlier, is expected to double from 30 million people in 2019 to 60 million by 2030, reaching nearly 250 million in 2050. If that is not an opportunity, I do not know what is.

We will have huge opportunities to sell high-quality iconic brands and products. Removing tariffs and giving greater clarity on legal certainty would support our UK businesses, such as those in the automotive, agrifood, machinery and pharmaceutical industries, to name but a few. That would also mean our manufacturers saving costs by getting cheaper parts for products, while our consumers in the UK would benefit from the variety and affordability of different products.

The opportunities for UK services and investment are huge. At the moment, they amount to £3.2 billion. The fact that the expanding services sector in India is expected to reach 54% of its economy demonstrates the opportunity for us as a trusted partnership.