UK-India: Comprehensive Economic and Trade Agreement

Lord Frost Excerpts

Wednesday 4th March 2026 Grand Committee

[Lord Frost (Non-Afl)]

My Lords, it is a pleasure to follow the noble Lord, Lord Johnson. I could not think of a single remark that I disagreed with, so maybe that should do, but I still have a few things I would like to say. I also pay tribute to the noble and learned Lord, Lord Goldsmith, and his committee, who have produced a thorough and interesting report on an important agreement.

It is a pleasure to speak on this subject because I have been involved in this FTA and its predecessors in various forms for quite some time. When the EU was negotiating back in the 2010s, I was the UK member of the trade policy committee, so I saw some of the preliminary work in that context. Then I moved on to run the Scotch Whisky Association and spent quite a bit of time in India when the EU negotiations were stalled and saw the effect of the stalling on what that industry was able to do. Then, in Downing Street during the Johnson Government, we were able to put a lot of effort into preparing what I think was a useful negotiating mandate and scoping document, which has been followed in most cases—except, I am sorry to say, the EU reset negotiations—setting out a lot of detail, aspiration and clarity about the direction that we were aiming to travel in. The current Government have picked up most of that, underlining its value.

I agree that any trade agreement of this scale and nature is worth having. Obviously, it has imperfections and areas where we would like more to have been done, but it is still a major achievement and one to be seen against the doubts expressed so often in this process. Many said that an agreement with India was impossible and could never be done by the UK or the EU, yet both have done one. That is a tribute to the efforts that have gone into this over the years. It is an important signal of liberalisation more broadly when the multilateral trade system is beginning to stall in various ways. It is also important, as others have said, to treat it as a living agreement.

The gains are significant. As has been touched on, the agreement will make a big difference to exports of spirits and cars, even if the tariff reductions are relatively slow. Procurement has not been touched on yet, but this is one area where the UK agreement is a bit more forward-leaning than the EU one, with a significant procurement chapter. One could wish for more on financial and, notably, legal services, but there are good benefits in other areas, in particular banking, which was an ask for the EU and a significant part of our mandate too.

There will always be problems with an agreement such as this. Rules of origin and bureaucracy in India will be complex, and the state-level apparatus in India is a major practical area of difficulty for anyone trying to do business there. When I was running the Scotch Whisky Association, I certainly spent enough time hanging around state-level offices of various kinds, as well as regulators and so on, in different parts of India, trying to get a hearing. I know just how difficult that can be. That will remain even though the Government-to-Government level will be improved. We have to be realistic about that.

I am absolutely with the noble Lord, Lord Johnson, on the benefits of free trade and of imports in particular. I am glad to see that that has been noted at various stages in the reporting. The 25% long-run boost to imports from India is a good thing for British consumers. We must not forget that trade is about imports as well as exports, and I hope that this agreement will be a good example of that. I share the slight reservations about the business mobility arrangements and the double contributions convention. That was probably our biggest sticking point when we were in the EU, and our reluctance to seek movement on that was a difficulty, so it is interesting that when these things are now much more live as an issue, we have felt able to agree it—all the more need to have a proper impact assessment to assess what is going on here.

So much for the agreement. I want to say a word about treaty scrutiny because I am out of the country on 16 March and I have made a point of speaking about it every time I have had the opportunity. The current arrangements under CRaG are unsatisfactory in various ways. They are unsatisfactory at a micro level, in terms of the time limits and intervals, the room to allow the committee and others with an interest to have a proper debate about this, and there is the more fundamental issue that there should at some stage in the process be a clear up-or-down vote in this Parliament on a trade agreement. We got that when we were in the European Union through the European Parliament, and of course the CRaG Act was devised when we were in the European Union and got that sort of vote. It is very unsatisfactory that the arrangements in this Parliament should be less good in this respect than those in the European Parliament. I hope the Government can look at this. It is good for debate on trade policy to have a proper process in this Parliament, with proper debate where the pros and cons of agreements are fully understood.

The barrister and former legal adviser to this Parliament, Alexander Horne, has, I think, sent the committee a draft of a potential piece of legislation to show how such arrangements might work. Perhaps that will be looked at systematically one day. However, this cannot rest. We need better, more formal and more fully debated arrangements for major trade agreements such as this one. I look forward to hearing what the Government have to say on that point.