LONDON — In a significant development, India has acknowledged that the United Kingdom is poised to offer only minimal modifications to its visa policies as discussions for a trade agreement progress towards their conclusion. A U.K. official has indicated that these new provisions may facilitate approximately 100 additional visas for Indian workers each year.
Negotiations intensify amid political sensitivities
Ministers in the U.K. have emphasized that securing a free trade agreement with India remains a crucial economic objective. However, the negotiations surrounding visa regulations for foreign workers have become a politically charged topic, especially with Nigel Farage’s Reform party targeting Labour strongholds.
According to the U.K. official, the proposed visa concessions fall far short of India’s initial demands, which included larger quotas for professionals, particularly in the IT and healthcare sectors. Recent weeks have seen the mobility chapter of the agreement finalized, designed to streamline inter-company transfers. A negotiator close to the discussions noted it is “not possible to put a number on” the potential influx of Indian workers this chapter might facilitate, describing any effort to quantify it as largely “political.” Nonetheless, the chapter is expected to provide businesses with a clearer understanding of the U.K.’s visa regulations, which have undergone numerous revisions recently.
Key discussions ahead as Indian negotiators push for more
Piyush Goyal, India’s chief trade negotiator, is set to visit London this week, where he is likely to advocate for further concessions in other areas of the trade discussions. Goyal is expected to press for exemptions from the U.K.’s upcoming tax on high-emission imports, as well as provisions allowing Indian firms to reclaim contributions to the U.K.’s state pension fund for employees on short-stay visas.
“This government is committed to doing the right deal with India which will improve access for UK businesses, cut tariffs, and make trade cheaper and easier,” said a spokesperson for the U.K.’s Department for Business and Trade.
Following the revival of negotiations in February, U.K. officials have communicated a noticeable shift in India’s readiness to negotiate, as noted by a senior business representative. However, India’s Finance Minister Nirmala Sitharaman has indicated that India is not in a rush to finalize a trade agreement with the U.K., especially given external pressures such as U.S. trade policies.
Moreover, India has raised concerns regarding the U.K.’s proposed carbon tax, which could significantly affect trade relations. Shashi Tharoor, chair of the Indian parliament’s committee on external affairs, mentioned that discussions surrounding this tax will be critical, particularly as the U.K. aims to align its Carbon Border Adjustment Mechanism with similar European measures. Goyal has been vocal about the detrimental impact this tax could have on Indian manufacturing and will seek clarification during upcoming discussions in Brussels.
As the global trade landscape continues to shift, securing a U.K.-India trade deal has become increasingly important for both nations, highlighting the necessity for flexibility and mutual concessions in the ongoing negotiations.