on October 28, 2023
Read Time: 8 Minutes
With the passing of another month, comes a continued lack of concrete news on the prospects for a long-anticipated free trade agreement (FTA) between India and the UK.
As the UK keeps on striving to present itself as a major trading power in the wake of its departure from the European Union (EU), the country’s authorities have continued negotiations with their Indian counterparts in their efforts to clinch a deal.
Although immigration has by no means been the only factor in the destiny of the talks between the two countries, it has nonetheless been flagged up as a key element by news outlets in both the UK and India.
Speculation has centred on whether the UK might be prepared to relax some of its visa rules for the benefit of Indian nationals. However, there remains much uncertainty, with claims and counterclaims having made as to what the respective sides have actually asked for in negotiations.
As the situation presently stands, there is not yet a UK-India Free Trade Agreement (FTA) in place.
In April 2022, the then-UK Prime Minister Boris Johnson stated that he and Indian Prime Minister Narendra Modi had agreed to get a deal done by the Hindu festival of Diwali, which fell on 24th October that year. However, Mr Johnson was forced out of office that September, and the October date came and went without news of an agreement.
Much reporting during 2023, however, has suggested that such a pact might finally be close to being reached. In the meantime, work has continued on a potential deal through various rounds of negotiations between the two countries. The UK Department for International Trade has previously stated that such an agreement would support the Government’s strategy of “continuing to develop the United Kingdom’s status as an independent trading nation which seeks trade and investment opportunities, champions free trade, and supports the levelling-up agenda in all regions of the UK.”
There has been much reference in both UK and Indian media to possible immigration implications arising from a UK-India FTA, once it is finalised.
It has been suggested that while the Indian side seeks to facilitate greater professional mobility for Indian nationals who may spend time in the UK for business purposes, the UK – which already grants around 100,000 work visas a year to Indian nationals – is reluctant to agree to a larger quota as part of an FTA.
In response, however, India has reportedly pointed out that skilled professionals across various sectors often don’t need long-term visas, due to their assignments frequently being shorter in duration. So, there would seemingly be scope in this area for the two sides to find common ground.
According to a recent Hindustan Times (HT) report, sources have claimed a broad understanding has been reached on 24 of the 26 chapters in the proposed FTA. The news outlet said that discussions between the two sides on business-related mobility have included the matter of whether skilled workers would be permitted to change jobs.
A factsheet issued by the UK Department for Business and Trade on 19th October 2023 stated that total trade in goods and services (exports plus imports) between the UK and India had been £36.3 billion for the four quarters to the end of 2023’s first quarter. This figure represented a 34.2% increase, or a rise of £9.2 billion, compared to the 12 months to the end of 2022’s opening quarter.
During the four quarters to the end of the first quarter of 2023, India was the UK’s 12th largest trading partner, accounting for 2.1% of total UK trade.
According to the High Commission of India in London, the UK is the sixth largest inward investor in India; its accumulative equity investment of US $32.82 billion for the period from April 2000 to September 2022, accounted for approximately 5.3% of all foreign direct investment into India. The UK Government has estimated that if a trade deal is reached between the two countries, this could have the effect of bolstering UK GDP by approximately £3.3 billion in 2035, up to around £6.2 billion in 2035 (in 2019 prices), depending on the depth of the negotiated outcome. This would be equivalent to a 0.12% to 0.22% rise in UK GDP by 2035.
Speculation that UK visas could, after all, be included in the UK-India Free Trade Agreement have not gone away; a Financial Times report on 18th October 2023, for example, stated that “New Delhi wants better access for manufactured goods, services, and work visas.”
However, the Indian side has already previously refuted suggestions that it has been looking to secure more UK visas as part of the negotiations.
As reported by The Economic Times in September, Indian High Commissioner to the UK, Vikram Doraiswami, said that his country was not looking for agreement on a greater number of visas, but was instead advocating for easier intra-company transfers and portable pensions.
He stated, in an interview with Times Radio, that India was “not asking for migrants to be able to come to the UK. In fact, we are a net recipient of migration, rather than a net sender of migrants.”
Mr Doraiswami elaborated: “What we have been asking for is simplification of the process by which intra-company transfers happen.”
He said that both Indian and British companies needed to be able to move their respective nationals between the two countries more easily. He added that it was important to secure an FTA that covered services and visa simplification for specialists, as well as guarantees that Indian students would be able to obtain work experience in the UK following their studies.
India has also reportedly been seeking assurance that Indians who spend time working in the UK will be able to have their contributions to pension funds repatriated to India when they come back to the country, instead of having to leave them behind.
Looking to the UK side, it is easy to see why ministers and their spokespeople have been eager to communicate a tough stance in response to any suggestions of greater numbers of UK visas for Indian nationals.
After all, by broader historical standards, net migration to the UK over the last few years has been high, driven by factors such as events in Ukraine, Afghanistan, and Hong Kong. The UK Government – with Rishi Sunak now installed as Prime Minister – has sought to bring down the net immigration figures in the longer run, instead of taking steps that could risk pushing them still higher.
So, it was unsurprising that in early September 2023, Mr Sunak’s spokesperson was quoted as saying to journalists: “The Prime Minister believes that the current levels of migration are too high… to be crystal clear, there are no plans to change our immigration policy to achieve this Free Trade Agreement, and that includes student visas.”
Earlier this year, trade minister Kemi Badenoch shed greater light on the UK’s thinking amid its India FTA negotiations. She said in June that the UK would discuss temporary business visas as part of the talks, but that any deal “will not contain commitments on immigration or provide access to the UK domestic labour market.”
The Secretary of State for Business and Trade was making a written response to Parliamentarians who had asked her how the Government ensured it “speaks with a single voice on migration and mobility in relation to a UK-India trade agreement,” while avoiding “disruptive political off-stage noises.”
Ms Badenoch further stated in her response that “there will also be no agreement to anything which undermines the principles or functioning of the UK’s point-based immigration system, or which undermines the UK’s ability to control its own border.”
She did, however, say that the talks would look into how to “make it easier for highly skilled professionals to deliver services in each other’s markets on a short-term and temporary basis.”
Controversy erupted last year due to reported comments by Home Secretary Suella Braverman, who was said to have told The Spectator: “I have concerns about having an open borders migration policy with India, because I don’t think that’s what people voted for with Brexit.”
The short answer to this question, on the basis of public statements by both countries, would appear to be “no”. However, with recent British media reporting in particular (less so that of the Indian news outlets) having indicated that the subject of UK visas might still be in play to some extent, it will be fascinating to see what emerges if a deal does finally get clinched this year.
It is worth noting that with pivotal elections looming in both countries as soon as 2024, and both sides having a degree of incentive to entrench their positions instead of rushing into an agreement, there is far from any certainty as to whether such definitive news could break over the next few months.
In the meantime, whether you are reading this as a would-be migrant or an organisation that could benefit from having skilled and experienced specialists in UK immigration law by your side, please don’t hesitate to get in touch with the Cranbrook Legal team today. You are welcome to give our award-winning team a call on 0208 215 0053, or to complete and submit our straightforward contact form to arrange a free consultation.