Lord Fox (LD)

My Lords, it is a pleasure to participate in this debate and to follow some excellent contributions. This report was the last one I worked on before rotating off the International Agreements Committee; I am missing it already. I congratulate the chair, my fellow committee members and the excellent secretariat, who prepared this report. There was a sense, I detected, of government triumphalism when this FTA was announced. That was somewhat justified. India has been famously protectionist and discussions had been long in process, so this agreement was an achievement. The IAC report acknowledges this, and the negotiating team who delivered the agreement should be congratulated. In a world where rules-based multilateralism has been shoved aside by a new zero-sum game philosophy, as has been noted, we should salute that the deal is compliant with Article XXIV of GATT. However, the arrival of the EU deal hard on the heels of the UK deal took some of the gloss off the potential competitive advantage for the UK that could have been delivered. I have previously asked the Minister in the Chamber for some analysis of the two trade deals. It would be good if he could put on the record the department’s current analysis of their relative values and the disparities between them, as well as how his department will act where the EU has a more beneficial term than we find in our deal. After 14 rounds of negotiation, it may have been the charisma of this Government that finally helped the deal across the line. However, I note that the presence of Trump’s tariffs must have loomed large in the minds of the Indians and assisted the EU, the UK and others in getting their deals across the line. Not unlike when we signed the CPTPP, there is talk of strategic realignment for the UK following this deal. Personally, I would be a bit cautious about the rate or significance of change that we might see as a result. However, the Government and our report speak about making this a starting point; a “living bridge” is the language used. It offers an important framework for future bilateral co-operation, which is how we should view it. As has been noted, as things stand, the UK has a trade deficit of around £9.7 billion with India, including a services deficit of £5.1 billion; those figures are based on Q2 2025 numbers. As was set out by the noble Lord, Lord Anderson, the scale of the potential deal is dwarfed by any future realignment or new alignment with the EU, but it is, as has been said, a significant possibility. I was surprised at the scale of the services deficit between our two countries. I highlight that because, as many of your Lordships have said, the services part of our economy has not been included in much measure. It is largely absent, with limited or no agreements on liberalisation. Legal services are left out; there is small movement on financial services; and there is no mutual recognition of professional qualifications, no commitment to cross-border data flows and no bilateral investment treaty, as the noble Lord, Lord Kerr, mentioned. The Law Society has bemoaned the failure to include legal services in the FTA, dubbing it a “missed opportunity” for the UK economy. For reference, India is one of the last large jurisdictions in the world in which the establishment of foreign lawyers is not possible, meaning that a lot of India-related legal work currently takes place outside India. The negotiators tried, I think, to gain access for our hugely successful professional services exports, so I am sure that the Minister would like to set out for your Lordships some detail as to why the final FTA failed to reflect any meaningful progress in this area. More generally, given the Government’s stated ambition to promote high-value services trade, how will the Government pursue a side agreement with India to liberalise its professional services markets? In the meantime, what steps is the Minister’s department taking to support UK professional services businesses that face restrictions in accessing the Indian market? How will the Government help them trade? As we have heard, it is a different story for goods. There are benefits for UK exporters, but a lot of them will not accrue for some time. India will reduce trade barriers gradually over 15 years, while Indian exporters will generally gain immediate access to the UK market. When it comes to our farmers, they often seem to be the sector that misses out—or, worse, is sacrificed for other potential gains. The previous Conservative Government undermined British farmers and our rural economy by agreeing to detrimental deals with Australia and New Zealand; those who disagree should look up what George Eustice, who helped negotiate the deals, had to say about them. One way to limit the scale of these sell-outs would be to involve the House of Commons in a vote on deals. I agree with the comments that we have heard about changing the way in which trade deals are monitored and approved by Parliament. With or without votes, the Liberal Democrats will continue to hold the Government to account to make sure that farmers are not undercut and that any imported foods meet the UK’s regulations on environmental protection and animal welfare. The committee’s report contains specific concerns about the food and drink sector, for which access is described as “cautious and phased”. For food and other goods, the expanding Indian middle class may create long-term demand for high-quality, value-added UK products, but, for many products, the agreement holds long-term promise rather than providing immediate commercial gains. Some UK food products are excluded entirely, and others will benefit gradually. As I said, in most cases, tariff reductions or eliminations are staged over five to 10 years. As the son of a man who milked cows, I say with due to respect to the noble Lord, Lord Johnson, that our dairy industry is particularly likely to face increased competition from India without reciprocal access to that market. Can the Minister outline what the Government are planning to do to address barriers such as the export health certificate for lamb, which currently makes exports of that product very difficult or impossible? More generally, will the Minister undertake to work with Defra and the devolved Governments to deliver a comprehensive review of the cumulative effect of successive trade agreements on UK agriculture? Further, as the noble and learned Lord, Lord Goldsmith, set out, there is scope for the Indian Government to introduce new so-called quality control orders. They hold the prospect of erecting new bespoke barriers for our exports, so can the Minister explain how the Government will monitor and police these orders? Also, how they will address their arrival with the Indian Government, if and when that happens? The UK automotive industry also benefits largely from what I would call the “jam tomorrow” clause. Currently, India is closed to UK vehicles, so any access is a win, but access will come “progressively”, which is another word for “slowly”. Tariffs may fall, but quotas will remain. If all goes well, it could eventually be a big market for the UK, but that depends on the survival of the British car industry over the next decade and more; in the meantime, Indian manufacturers will have much better access from day one. There will be more Indian vehicles on British roads than the other way round for some time to come. For this to be positive for our GDP, UK business has to be equipped with the knowledge of how to use this new access and navigate the not inconsiderable non-tariff barriers that will remain. Rules of origin are particularly complex and there needs to be an explicit effort from government to support businesses, especially SMEs, to fully utilise this agreement. This should include sector-specific guidance from the department and from the high commission in India. Following the excellent point from the noble Baroness, Lady Gill, how will we use the considerable links via the diaspora as a springboard into markets for us to take the benefit of this treaty? There is also a likelihood of trade displacement and impacts on developing countries. In other words, goods perhaps previously sold by Bangladesh will be eased out in favour of goods being sold by India. I ask the Minister to undertake to monitor, in particular, the cumulative impacts of trade agreements on developing nations. With apologies to the upbeat noble Lord, Lord Bates, I may have seemed a little gloomy in this speech, but its tone has been balanced by other speakers in this debate. In general, there is a danger of conferring too many hopes on this FTA, but it would be equally wrong to disparage it. It is a very good start.