Billions of kilos in potential tariff financial savings from the UK’s landmark commerce cope with India might be put in danger until the Authorities rethinks plans to chop export help workers, MPs have warned, elevating issues that British companies could battle to show the settlement into real-world development.
In a report printed on Wednesday, the Enterprise and Commerce Committee mentioned deep reductions to commerce help roles inside authorities might undermine the effectiveness of the UK–India Complete Financial and Commerce Settlement (CETA), regardless of its standing as the most important bilateral commerce deal struck since Brexit.
The warning comes as ministers place the settlement earlier than Parliament for ratification, triggering the formal scrutiny interval. New evaluation by the committee estimates that preliminary tariff financial savings for UK exporters to India might whole round £400 million a 12 months, rising to as a lot as £3.2 billion yearly inside a decade as export volumes enhance. MPs cautioned, nevertheless, that these features could by no means materialise if companies are left with out enough help to navigate India’s advanced administrative system and intensive non-tariff limitations.
Below the settlement, the Authorities expects the deal to carry UK GDP by £4.8 billion a 12 months by 2040 and enhance annual bilateral commerce with India by £25.5 billion, a major uplift on the £43 billion recorded in 2024. Automotive exports are forecast to rise sharply, whereas spirits producers are additionally anticipated to profit from main tariff reductions. The settlement additionally marks the UK’s first entry into India’s central authorities procurement market.
Regardless of the size of the chance, MPs mentioned the sensible challenges of working in India danger blunting the deal’s impression, notably for small and medium-sized exporters. The committee urged the Division for Enterprise and Commerce to take a much more energetic function in implementation, together with supporting corporations to make use of the settlement, monitoring uptake and intervening shortly the place limitations emerge.
Issues are heightened by plans to chop nearly 40 per cent of the UK commerce workers who would in any other case be tasked with serving to companies broaden exports to India. MPs mentioned this created a critical supply danger on the coronary heart of the Authorities’s development technique.
Rt Hon Liam Byrne, chair of the Enterprise and Commerce Committee, mentioned Parliament was being requested to approve a deal promising billions in tariff financial savings whereas the assets wanted to make it work have been being stripped away.
“That is the largest free commerce deal since Brexit, with the potential to ship billions in tariff financial savings for UK exporters, boosting development and creating new jobs,” he mentioned. “However ratification is barely the beginning. Ministers should now set out a transparent plan, backed by actual assets, to show entry on paper into exports in follow.”
The committee additionally questioned whether or not the settlement goes far sufficient on companies commerce and entry for expert professionals, saying it remained sceptical about what can be delivered in follow. With no bilateral funding treaty included, MPs known as on ministers to develop a extra bold imaginative and prescient for a future settlement to unlock additional UK–India funding.
There have been additionally warnings about potential downsides for sectors comparable to textiles and ceramics, which already face intense competitors from Indian imports. MPs reiterated earlier issues that, within the absence of binding human rights provisions within the deal, the Authorities should set clear and enforceable expectations to stop UK companies being undercut by labour abuses in abroad provide chains.
Business figures advising the committee mentioned the settlement might act as a catalyst for deeper collaboration if adopted by additional motion. Pankaj S Kulkarni, head of banking, monetary companies and insurance coverage at Tech Mahindra, instructed MPs {that a} bilateral funding framework can be a crucial subsequent step to unlock extra UK–India funding, notably in areas comparable to synthetic intelligence.
Mohit Joshi, chief government and managing director of Tech Mahindra, mentioned the settlement had the potential to speed up development throughout each economies. He mentioned India’s expertise pool and engineering energy, mixed with the UK’s analysis and innovation capabilities, created a strong platform for long-term collaboration and certainty for companies working in each markets.
The committee concluded that whereas the UK–India settlement units a powerful basis, it must be handled as a place to begin slightly than a completed product. With out adequate workers, oversight and accountability, MPs warned, the deal’s promised financial advantages danger remaining theoretical slightly than transformative.
