- Debate on India-UK Free Trade Agreement took place in the UK House of Commons this week
- Trade Secretary Andrew Griffith criticised the deal for excluding UK services and slow tariff cuts
- Trade Minister Chris Bryant defended the agreement, citing support from UK businesses and experts
The Brits are known for their wit, and a specimen of it was seen in the UK Parliament this week, when members across party lines debated on the merits of the India-UK Free Trade Agreement (FTA) in the House of Commons. While Trade Secretary Andrew Griffith criticised the deal, comparing it to "a bag of soggy poppadums" for failing to include UK services in the agreement, Trade Minister Chris Bryant defended it, saying UK businesses saw it as a "fine tandoori".
The India-UK deal came under fire in the House, with some MPs (members of parliament) criticising the Keir Starmer government for failing to include provisions to support UK services, especially legal services, for allowing Indian workers and their employers to evade paying National Insurance for three years, for taking five to 10 years before British goods exporters see tariff reductions, whilst Indian goods exporters will see them immediately, and for failing to agree to a bilateral investment treaty, among other things.
"British businesses needed something with a really good kick in it to get this country growing. Instead of a vindaloo of a deal, the Prime Minister came back with a bag of soggy poppadoms," Griffith said, criticising the deal.
Conservative MP Katie Lam also tried to corner the government, saying, "We have already seen this model take hold in the US. The result has been a massive expansion in the number of lower-cost Indian workers at the expense of American workers."
Defending the deal, Trade Minister Chris Bryant noted that the India-UK agreement goes well beyond India's precedent in opening the door for UK businesses.
Labour Party MP Chris Bryant (AFP)
"The UK-India Comprehensive Economic and Trade Agreement (CETA) is the UK's most economically significant bilateral free trade agreement since leaving the European Union," he said, quoting a Select Committee report.
"On services, the way we transacted this deal means it is supported by the Federation of Small Businesses, HSBC, Standard Chartered, EY, TheCityUK, and Revolut, and I do not think they think of the deal as "soggy poppadoms" at all; I think they think of it as a fine tandoori," he added, pointing out that by 2050, India will be home to more than a quarter of a billion high-income consumers, offering a huge market to UK exporters.
The minister noted that the deal boosts UK GDP by 4.8 billion euro, which is 0.13 per cent of the country's GDP. "It boosts wages by 2.2 billion euro, and it boosts bilateral trade by 25.5 billion euro every year in the long run, by 2040. India will drop tariffs on 90 per cent of lines, covering 92 per cent of current UK exports, giving the UK tariff savings of 400 million euro a year immediately on entry into force, rising to 900 million euro after 10 years, even if there is no increase in trade. India's average tariff will fall from 15 per cent to 3 per cent," he said.
Labour MP Douglas McAllister also welcomed the agreement, saying it was a "truly historic and groundbreaking deal for the UK, for Scotland and for my West Dunbartonshire constituency."
"As the minister said, India is the fastest-growing country in the G20, and it is set to become the third-largest economy in the world by 2028. For this reason, it is crucial to secure a strong and mutual relationship with India," he said.
"In the current geopolitical climate of uncertainty and instability, these relationships are more important than ever. This government has delivered a favourable deal that brings hope and investment for the future. Through this deal, we are making significant progress towards achieving our growth mission," McAllister added.
