UK-India: Comprehensive Economic and Trade Agreement

Lord Sahota Excerpts

Wednesday 4th March 2026 Grand Committee

[Lord Sahota (Lab)]

My Lords, I speak passionately in support of this landmark trade agreement between the country of my birth and my adopted country. This comprehensive economic and trade agreement represents a defining moment in our post-Brexit trade policy and stands as one of the most economically significant bilateral agreements we have ever signed. It is a deal that both Governments have described as historic in ambition and scope. It is designed to boost bilateral trade by an estimated £25.5 billion. It will increase UK GDP by around £4.8 billion and raise wages by £2.2 billion annually over the long term. Most importantly, it will unlock new markets and opportunities for British businesses and consumers alike. Some of these have already been mentioned.

The agreement will reduce or eliminate tariffs on the vast majority of goods traded between our two countries. India has agreed to cut tariffs on 90% of British products, with many phased down to zero or significantly lowered over a decade, including for iconic UK exports such as whisky and gin. Duties on these spirits will be reduced from 150% to 75% on its entry into force and then staged down to 40% over 10 years, opening enormous opportunities for one of our most valuable sectors. In return, Britain will eliminate tariffs on around 99% of Indian goods, expanding consumer choice and bringing greater variety and affordability to British households in products ranging from clothing and footwear to food, jewellery and speciality goods.

However, this agreement is about much more than tariffs and numbers. It delivers meaningful regulatory co-operation, streamlined customs procedures and new access to India’s public procurement market, worth billions annually and previously largely inaccessible to UK firms. It also contains provisions to support digital trade, protect intellectual property rights and facilitate collaboration on innovation in crucial sectors such as clean energy, advanced manufacturing and technology.

This deal has been recognised by the House of Lords International Agreements Committee as “a significant achievement” with “a formidable negotiating partner”, as has been said. That recognition matters: it underscores the strategic importance of this partnership in anchoring the UK’s broader economic and geopolitical engagement in the Indo-Pacific region.

Crucially, this agreement vindicates the vision of a globally outward-looking Britain. India is one of the fastest-growing major economies in the world and is projected to become the third-largest global economy by 2030. I thought it was by 2050 but the noble Lord, Lord Ahmad, said it would be by 2030, and I will accept that. By strengthening our commercial ties with India, we are not only expanding markets for UK exporters and investors but deepening political, cultural and educational links that have existed for centuries. The UK’s Indian diaspora, our living bridge of nearly 2 million citizens, will have a key role in supporting ever closer co-operation across trade, technology, culture and innovation.

This agreement is not simply an economic instrument; it is a reaffirmation of our global ambition and our commitment to inclusive, rules-based trade that benefits workers, business and consumers across our country. It reflects a modern partnership of equals, a far cry from the era when trade relationships were shaped by power rather than partnership. For those reasons, I welcome and support it.