UK risks being too soft in India trade talks, says ex-minister

Former British prime minister Boris Johnson was warned that the UK was repeating the mistakes of the UK-Australia trade deal by being too soft in its negotiations with India, according to a letter seen by the Financial Times.

The then agriculture secretary George Eustice wrote to Johnson on June 27 to complain that an internal Whitehall agreement designed to avoid a repeat of the one-sided concessions made to Australia on food exports had been “watered down”.

“We cannot risk another outcome such as Australia where the value of the UK agri-food market access offer was nearly double what we got in return,” Eustice wrote after the conclusion of the fourth round of UK-India trade negotiations.

His doubts emerged as the UK attempts to agree a multibillion-pound trade deal with India that Prime Minister Rishi Sunak hailed on the sidelines of the G20 summit in Indonesia on Tuesday as a “fantastic opportunity” for Britain.

Hopes of an agreement in time for the Hindu festival of Diwali last month took a hit after the home secretary Suella Braverman expressed “reservations” that the deal may lead to increased immigration — drawing an angry reaction from New Delhi.

In his letter Eustice warned that the Cabinet Office had “watered down” previously agreed Whitehall safeguards that would have enabled ministers from other departments to push back if the Department of Trade made concessions they considered to be too deep.

On Monday Eustice, who led the agriculture department between 2020 and 2022, took the gloss off the UK-Australia deal announced by Johnson in December 2021 by telling MPs the agreement had given away “far too much for far too little in return”.

Eustice said in his letter to Johnson that the UK-India deal could be a “huge opportunity” for UK food exports, including whisky, salmon and cheese, but that he had concerns after India initially offered to liberalise tariffs on only half as many agricultural products as British negotiators had put forward.

“I am aware that India is a tough negotiator but I firmly believe the UK should be too,” he wrote.

Whitehall insiders confirmed that the dispute over the management of the UK-India negotiations had not been resolved by the time Eustice left office this summer.

Negotiations between the two sides are continuing, but since the departure of Johnson’s successor, Liz Truss, from Downing Street expectations of a quick resolution have slipped, with officials on both sides suggesting the new target for a deal would be next March.

At the G20 summit Sunak said he was looking forward to discussing a trade pact with Indian prime minister Narendra Modi on Wednesday, when the two leaders will meet for their first formal bilateral meeting.

But Sunak added he would not rush into a deal with India. “I wouldn’t sacrifice quality for speed. And that goes for all trade deals. It’s important that we get them right rather than rush them and so that’s the approach I’ll take on trade deals.”

Ahead of the meeting, Sunak and Modi confirmed a visa scheme that will offer 3,000 places a year to degree-educated Indians aged between 18 and 30 to live and work in the UK for up to two years. The scheme will be reciprocal.

If concluded, the trade deal would be the most significant reached by Britain since it left the EU. India is on track to be one of the world’s fastest-growing large economies this year, and the country recently overtook the UK to become the world’s fifth-largest economy.

For India, the proposed agreement would be the latest in a series of trade pacts concluded by Modi’s government, but negotiators have struggled to agree on the final details.

Sensitive areas include a push by New Delhi to secure greater visa access to Britain for Indian IT professionals, and the UK’s desire for India to open its protected services industry to British law and financial groups.

Access to India’s spirits and car markets have been among other issues broached in the talks, as well as data protection for UK-based companies that do not want to fall foul of India’s increasingly tough regulation of the internet.

Downing Street said it would not comment on leaks or details of live negotiations. “We will only sign a deal that is fair, reciprocal and ultimately in the best interests of the British people and the economy,” a spokesperson said.