UK-India: Comprehensive Economic and Trade Agreement

Baroness Prashar Excerpts

Wednesday 4th March 2026 Grand Committee

[Baroness Prashar (CB)]

My Lords, I, too, thank the noble and learned Lord, Lord Goldsmith, for introducing this debate. I commend the committee on its constructive assessment of this highly significant agreement and on situating it within a wider, coherent strategic framework that recognises India as not merely a trading partner but a global pillar of our economic resilience and long-term security and stability.

I have been working in the UK-India corridor for a number of years, and I have two interests to declare. First, in my capacity as a deputy chair of the British Council from 2012 to 2018, I was involved with the UK-India year of culture, which laid the groundwork for more effective cultural exchange, education and collaboration, as well as a deeper understanding of modern India and a changing UK.

Secondly, from 2020 to 2024, I chaired the Federation of Indian Chambers of Commerce and Industry UK Council, or FICCI. Through it, we worked closely with businesses across sectors to develop a memorandum, which was submitted to negotiators on both sides. That memorandum highlighted the practical challenges around non-tariff barriers and emphasised the importance of social security arrangements to support professionals working across borders. I note that, last month, both countries agreed to negotiate on the double contributions convention, which I see is now a work in progress.

Looking back over the past 10 years or so, a trade deal of this magnitude was a pipe dream. Talk of trade prioritised only petty give and take and was very transactional in its nature. Ashok Malik, a leading Indian journalist, described it as a nation of shopkeepers talking to a civilisation of bargain-hunters. My experience with FICCI and the British Council underlines the point made by the committee that,

“there would be mutual benefit to both parties in further strengthening the relationship, particularly in areas not included in the Agreement”.

Further, the committee urged the Government to,

“utilise the range of existing dialogue mechanisms and networks to further enhance the relationship in substantive and symbolic terms”.

I cannot emphasise this enough because the work that we did in education is now paying dividends.

As other noble Lords have said, this agreement is a foundation to build on. It is an investment in our future relationship with India, and it sends a powerful message that co-operation grounded in shared ambition remains the most effective response in an increasingly uncertain world. It signals a commitment to building a durable partnership with a fast-growing democratic country. It is forward-looking and value-based and has the potential to contribute to the world governance architecture. It is compliant with the WTO rules and contains chapters on labour, the environment, development, gender equality and anti-corruption. The liberal public procurement provision, which partially opens the Indian procurement market for the first time, is welcome and should be built on. It secures an improved open market for exporters, although more work is needed.

There are shortcomings, of course; these are clearly highlighted in the report. Yes, the agreement does not liberalise services beyond the current WTO commitment, and, as has already been said, the exclusion of legal services is a disappointment and a missed opportunity. These are concerns. There are, of course, concerns around the use of non-tariff barriers and the quality control orders that will require monitoring and addressing through continuous work and engagement with India.

However, these shortcomings should not obscure the clear advantages and opportunities the agreement provides. The real test will be in implementation—ensuring the opportunities are understood, appropriate dialogues are facilitated, small and medium-sized enterprises are supported to navigate their way through complexities and all relevant parties are engaged in helping to realise the agreement’s full potential. I am aware that there are mechanisms in place and the JETCO is being revived, but these must be made to work. We must not lose the momentum.

Furthermore, India is not just a large market but a rising power, a key Indo-Pacific actor and an increasingly influential voice in shaping global norms. Technology governance, supply-chain resilience, climate transition, maritime security, counterterrorism co-operation and cyber resilience are all areas where strategic alignment is necessary. So, a mature partnership with India is an imperative, and this, I am glad to say, is recognised in the national security strategy published last year.

A successful implementation and deepening of our broader relationships will be shaped by how we handle trade irritants, pinch points, regulatory dialogue and other political sensitivities, because our relationship must be framed on the basis of mutuality. This means recognising India’s strategic autonomy and distinct foreign policy tradition, and it means engaging with respect, building trust through meaningful engagement and consistency and collaboration.

India is also diversifying its partnerships. We are now one among many partners and we cannot be complacent. As the report says, given the size and significance of India, the Government should give high priority to this deal and treat it as a living instrument. We must ensure that our competitiveness is not inadvertently weakened. We must articulate what is distinctive about this partnership. We bring enormous strength to this relationship—deep educational and research collaboration, legal and institution familiarity, extensive diaspora ties that are lived and dynamic, and much more. Our industrial strategy supports this agreement in areas such as manufacturing, clean energy, financial services, life sciences, digital technology sectors and creative industries.

As others have said, this agreement is a real achievement, something which did not look possible a decade ago but its success will depend on our operational readiness, our coherent and strategic vision of our relationship with India, and how we engage with the India of today.