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5 Jul 2022

Shalini Bhutani

Corporate interests over human interests in the India-UK trade talks

The governments of the Republic of India and the United Kingdom are currently negotiating a free trade agreement (FTA). Although four rounds have reportedly already been concluded, with a fifth due in July 2022, there has been little public awareness or scrutiny of the negotiations. Instead, both Indian and British companies have been closely involved in supporting the negotiations, raising concerns that a deal will prioritise corporate interests above human rights. Given the profound impact trade agreements can have on a wide range of human rights, this is deeply concerning. In particular, civil society groups will be closely monitoring the labour and environmental chapters of any deal.

In June 2021 the Government of India sought suggestions from trade associations and the public after the announcement of an India-UK Enhanced Trade Partnership, the first step towards a full trade agreement. That short announcement remains the only source of publicly available details on what the proposed FTA might look like.

This lack of transparency rings alarm bells. A free trade agreement entails reduced barriers to export and import of goods and services between the countries involved. Pursuing ‘free trade’ implies choosing a policy pathway where governments do not interfere with tariffs, but instead let market forces reign. In these post-pandemic times, governments should retain the flexibility to direct trade flows to ensure trade works in the public interest and in support of human rights. This holds especially true between trading partners at very different levels of human development such as India and the UK. Indian stakeholders are rightly concerned about the impact a comprehensive free trade agreement will have on vulnerable workers in the agricultural sector, as well as on India’s pharmaceutical industry.

There is a long history of Indian domestic opposition to FTAs. In June 2007 the Government of India began trade talks with the European Union (EU). These were formally relaunched in June 2022 after a pause of several years, in light of both disagreements between the parties and strong opposition from the public, who only came to know of its possible content from leaks.

Neither the UK deal or the EU deal have any social backing; popular opposition has been expressed through street protests by farmers and trade unions, as well as by civil society networks such as the Forum for Trade Justice, which was created in 2009 in response to the EU negotiation. Since then, grassroots groups have been calling for transparency and public consultation to be a guaranteed feature of any and all trade negotiations.

According to the Constitution of India, the executive branch can negotiate and sign a trade agreement sans Parliamentary scrutiny. Only when a law is proposed in compliance with that particular agreement will the matter come before the two Houses of the Indian Parliament.

The process must be made more open, with ex ante assessments of the likely impacts of any deal on lives and livelihoods accompanied by a thorough process of public consultation. This is a means to secure valuable public buy-in for trade agreements, as well as to improve the extent to which deals will deliver for citizens. Of course, public hearings won’t automatically mean trade deals will become more acceptable to civil society or be more responsive to the real needs of societies.

However, there is little indication the India-UK negotiation will feature much in the way of public consultation. Instead, it is the voices of industry that will be heard the loudest.

A new UK-India Industry Taskforce was set up in May 2022 to focus on the trade deal, established jointly by the Confederation of British Industry (CBI) and the Confederation of Indian Industry (CII). The CBI actively targets markets “where the UK has proven competitive advantages”, including India. This strategy is made clear on the CBI’s website: “(t)he CBI continues to engage with its members and with the Indian Industry to catalyse the essence of a deal which benefits businesses. The CBI is lobbying and pushing forward for an agreement which unlocks greater ambition over pace. The UK-India Business Council hosted 18 pre-FTA consultation roundtables throughout July and August 2021 to gather intelligence from business and inform the FTA consultation process.” Likewise, the CII has been contributing to the content of the deal in partnership with India’s Department of Promotion of Industry and Internal Trade.

Given the history of relations between India and the UK, and the fact that the East India Company that came to trade eventually established ‘company rule’, the issue of trade between the two countries remains an emotive one for movements. If companies are allowed to rule the process, it’s doubtful the deal will deliver for people.

Shalini Bhutani is a legal researcher and policy analyst based in New Delhi, India. She is a member of India’s Forum for Trade Justice.

Trade and corporate accountability

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