Assam tea workers

Outgoing PM Boris johnson had set Diwali, in October, as adeadlinje for any agreement on a trade deal

The government should ensure any free trade agreement with agriculture giant India does not allow pesticide-tainted food to be exported to the UK, activists have said.

A new report by Pesticide Action Network India described a “dangerous situation of pesticide usage” in what is the world’s biggest rice exporter and dairy producer, as well as the second biggest grower of wheat and tea.

PAN’s UK office speculated that the UK government was “likely to face considerable pressure to water down pesticide standards” during FTA negotiations with India.

A Department for International Trade spokesman said the UK has “strict statutory limits for pesticide residue levels on imported food and a robust programme of monitoring”.

“Products which don’t meet our requirements won’t be permitted to be sold in the UK”, the spokesman added.

A fifth round of UK-India FTA talks ended on July 29, with the DIT saying at the time the government would “continue to work intensively throughout the summer towards our target to conclude the majority of talks on a comprehensive and balanced free trade agreement by the end of October 2022”.

Outgoing prime minister Boris Johnson added during a visit to India in April that he hoped a deal would be agreed “by Diwali”, the late October festival of lights, which is a public holiday in south Asia and widely celebrated among the millions of Brits of Indian descent.

But Josie Cohen, PAN UK’s head of policy and campaigns, cautioned against “rushing through negotiations”, saying FTAs with big economies usually “take years” to finish.

The two governments started discussing the proposed FTA in January, with the UK saying at the time it was “committed to upholding our high environmental, labour, food safety and animal welfare standards in our trade agreement with India”.

Trade secretary Anne Marie Trevelyan said India’s gross domestic product, which grew by almost 9% last year and exceeds the UK’s, was on track to be the world’s third biggest by mid-century. Hundreds of millions of shoppers, she said, would offer a “huge new market for our great British producers and manufacturers across numerous industries from food and drink to services and automotive”.

The House of Lords international agreements committee said last month in a report on the proposed FTA that UK consumers could benefit from “cheaper goods and greater choice” under the deal.

However the government “should not agree regulatory equivalence that would result in reduced standards or lower consumer protection”, the committee argued.

The UK “should offer only targeted tariff reductions to India for food and drink to protect the interests of UK manufacturing or consumers”, the Food and Drink Federation suggested in an earlier report.

FTAs with Australia and New Zealand queried again over standards

Any market access horse-trading around pesticides would hand “a competitive advantage” to Indian farmers, PAN UK warned, echoing similar comments it made earlier this year about lowering standards for food imports from Brazil, a major source of coffee and meat.

India’s tariffs on British goods average 15%, but for food, that climbs to 34% – “prohibitively high”, according to the FDF – which said “India’s rapidly growing middle class presents major opportunities for UK exporters” due to “booming” demand for “health, organic, fortified and ready-to-eat packaged food”. 

Scotch, the UK’s biggest food and drink export, faces Indian customs duties of over 100% – barriers Johnson and the industry said they hope to see lowered under a FTA. Despite the high tariffs, India is the second biggest by-volume destination for the tipple, but one where it only has 2% share of the market, according to the Scotch Whisky Association, meaning “huge potential” for growth under a FTA.

“Any trade deals we can do, it can only be a good thing,” said Mike Parr, MD of logistics firm PML, which handles supply chains for food importers and exporters from bases at Heathrow Airport as well as near the ports of Dover and Folkestone.

David Swales, AHDB’s chief strategist, said there could “be big opportunities” for British exporters of branded dairy products in India, though he did not expect any deal to yield the same levels of market access as the government’s two post-Brexit FTAs with Australia and New Zealand, which have not yet come into force but which British meat producers have criticised.

While there was no sign the imminent transition to a government led by either Liz Truss or Rishi Sunak would delay the UK-India negotiations, there have been pointers suggesting a deal would take time to finish.

Describing the Diwali deadline as “arbitrary”, the Lords committee warned that “India’s historically protectionist policies, different regulatory approaches and business practices, mean that overcoming barriers would require, in many areas, changes to India’s domestic legislation, which would likely be difficult to secure and be a lengthy process to implement”.

Last week a range of UK business groups, including the Society of Motor Manufacturers and Traders, the Association of the British Pharmaceutical Industry and the Chemical Industries Association, echoed the PAN warnings against a rushed deal, asking Trevelyan not to jeopardise a “once-in-a -lifetime opportunity” of a FTA with India.

Delhi might not be rushed, in any case, as it has in the past been reluctant to negotiate FTAs and has for the most part run a protectionist trade policy for goods – food and farm products included – since independence was won after World War II.

India and the EU resumed negotiations over a free trade and investment agreement in June, after a previous attempt to make a deal was abandoned in 2013 after six years of talks. 

The finalisation in 2019 of the Regional Comprehensive Economic Partnership (RCEP), a 16-country Asia-Pacific deal described as the world’s biggest FTA, had been delayed for years over India’s reluctance to cut tariffs. Delhi in the end pulled out of the deal.

After more than year of protests by farmers, the Indian government was forced in late 2021 to drop its proposed agricultural reforms, a precedent suggesting Delhi would be unlikely to come to terms on any FTA that could anger hundreds of millions of Indian farmers.