The recently announced UK-India Free Trade Agreement (FTA) came under intense scrutiny in the House of Commons on Monday, with lawmakers across party lines questioning its structure and long-term implications.
During the debate, Shadow Trade Secretary Andrew Griffith criticised the agreement, arguing that expectations had not been met. Using colourful language, he suggested the deal lacked substance compared to what had been promised.
Trade Minister Chris Bryant defended the agreement, highlighting India’s growing economic potential. He pointed out that by 2050, India is expected to have more than 250 million high-income consumers, presenting significant export opportunities for British businesses.
Key Areas of Concern
Despite the government’s defence, MPs from multiple parties expressed dissatisfaction over several aspects of the deal.
One major concern was the limited inclusion of UK service sectors, particularly legal and professional services, which many lawmakers believe are critical to Britain’s economy.
Another contentious issue was the Double Contributions Convention (DCC), which allows Indian employees temporarily working in the UK — along with their employers — to avoid paying National Insurance contributions for up to three years. Critics argued that this could reduce hiring costs for overseas workers and potentially disadvantage domestic employees.
Griffith claimed that the cost difference could make hiring certain professionals from India significantly cheaper than recruiting locally.
Conservative MP Katie Lam questioned whether such arrangements were appropriate, noting that similar agreements are typically made with countries that have comparable economic structures and social security systems.
Tariff Timelines and Investment Treaty
MPs also raised concerns about the timeline for tariff reductions. While Indian exporters are expected to benefit from immediate tariff cuts, some British exporters may have to wait five to ten years before seeing similar advantages.
The absence of a bilateral investment treaty was another point of criticism, along with the lack of enforceable clauses on labour rights and human rights standards.
Some lawmakers warned that the agreement could lead to increased imports from India, potentially putting pressure on certain domestic industries.
Government’s Response
In response to concerns over labour cost advantages, Bryant stated that Indian professionals working in the UK would still be subject to additional charges, including the immigration health surcharge and the immigration skills charge.
He maintained that the agreement provides long-term economic benefits and strengthens bilateral trade ties between the two nations.
Ongoing Debate
The parliamentary debate underscores the political sensitivity surrounding trade agreements, especially those involving labour mobility and domestic employment concerns.
While the government views the FTA as a strategic partnership with a fast-growing economy, critics argue that implementation details and safeguards must be carefully monitored to protect British workers and industries.
The discussion signals that scrutiny of the agreement is likely to continue as its provisions begin to take effect.
Originally published on 24×7-news.com.
