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Preferential Trade Agreement with India

Volume 654: debated on Thursday 7 February 2019

4. What recent assessment he has made of the potential for a preferential trade agreement with India. (909088)

India is an important part of our future trading arrangements. The UK-India joint trade review has enabled us better to understand the bilateral trade relationship by examining trade flows and barriers that could be jointly addressed. Collaboration is continuing to address barriers in the food and drink, life sciences and information and communications technology sectors. The appointment of Her Majesty’s trade commissioner in 2018 also provides a joined-up and co-ordinated Government effort to promote UK trade and prosperity in India.

I thank the Minister for his answer. He will be aware that the UK is the third biggest investor in India and India is the third biggest investor in the UK. What more can we do to ensure that we increase the trade as we leave the European Union and set out on our own free trade mission across the world?

I thank my hon. Friend for his question. Crispin Simon, the aforementioned HMTC, is leading the Department’s network to grow trade in key sectors. UK exports to India grew by 28%, to £7.9 billion, in the year ending quarter 2 2018, making that seven consecutive quarters of growth. Goods exports increased by 38% in the same period. Following the launch of the UK-India technology partnership by the Prime Minister and Indian Prime Minister Modi in April 2018, there have been many successes, including the healthcare AI catalyst programme. We have worked closely with many companies, such as BT, Rolex, Diageo, GlaxoSmithKline, Marks & Spencer and G4S.

The Minister might know that, in the Leeds city region, which includes Huddersfield, we have many brilliant businesspeople from an Indian background and they of course have very good partnerships with India. They are totally demoralised at the moment, partly because of this Secretary of State. I would not wish him to go into hell, but they have no confidence in him and they have no confidence in shrinking the potential market for India from 650 million to 65 million people.

All I can say is that the hon. Gentleman is entitled to his opinions, but I happen to disagree with him fundamentally. We have a close trading relationship with India, and we are working extremely hard to grow trade there. The figures I have already given him this morning demonstrate that there is potential in India, which we are exploiting and will continue to exploit if and when we leave the EU.

India of course is in the EU’s generalised scheme of preferences, whereas nearby countries such as Pakistan and Sri Lanka are in GSP+, with Bangladesh probably soon to join them. Does my hon. Friend agree that, if we were to adopt Labour’s customs union policy, we would have to accept EU trade preference policy without any say in its formulation? Does he also agree that that would lead to a big decline in UK foreign policy influence in south Asia and among diaspora communities in the UK?

One reason why the Prime Minister has put forward the deal that she has to the House is that it allows the flexibility for us to engage in the ways in which my right hon. Friend expects us to be able to —actively with the south Asia region, and India in particular—and to prescribe our own preference schemes such that we can control our own rules.

Is it not the case that the priority for the Indian Government is a trade deal with the EU and that the best way for the British state to have a trade deal with the EU is to stay in the EU customs union?

The Indian Government’s priority is likely to be trade with anybody with whom it suits. The hon. Gentleman simply needed to listen to the answer I gave a little earlier: there has been a 28% increase in UK exports to India, to £7.9 billion, in the year to quarter 2 2018, and a 38% increase in goods exports. We can conclude from that there is plenty of attention in India on UK trade.