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India is determined to pursue easier visa rules for skilled professionals that its companies hire in the UK, as it works towards finalizing a free trade pact with the country by the end of 2023. The push for visa relaxation comes in addition to India's long-standing request for more visas for Indian workers in the UK. However, the visa issue has been a significant hurdle in the negotiations, which caused the talks to go beyond the initial deadline of October 2022.
Indian companies are the second-biggest foreign investors in the UK, which further strengthens India's argument for hiring flexibility for its businesses. The free trade pact negotiations also cover the possibility of a carbon tax that the UK may impose on steel imports, rules of origin issues, and longer-term work options for Indian students in the UK.
The UK has previously expressed its desire to finalize the deal by Diwali in 2022. However, it failed to do so, prompting Business and Trade Secretary Kemi Badenoch to visit India in December 2022 in an attempt to move forward with the deal. The talks' latest round began on Monday, with both India and the UK aiming to double bilateral trade between the two nations by 2030.
While the UK government wants to cut tariffs and open opportunities for its services to operate in India, a free trade pact with the seventh-largest buyer of Indian goods is crucial for India to achieve its target of $2 trillion in exports annually by 2030. Additionally, it will help India become a top choice for companies shifting supply chains away from China.
However, UK's business and trade department spokesperson clarified that the country has been clear in negotiations that trade and immigration are separate policy areas. A free trade agreement with India will not include commitments on immigration, the spokesperson added. India's Trade Ministry has not responded to an emailed request for a comment.
As the negotiations continue, India is also seeking a levy on imports with higher carbon footprints, longer work options for Indian students in the UK, and a more balanced social security system for its workers in the UK. In contrast, the UK's key demands include lowering import duties on automobiles and Scotch whisky.
Richard McCallum, group CEO of the UK India Business Council, noted that there is strong political will on either side to finalize the agreement. The free trade pact with India has long been a prized goal for the British government, and India hopes to leverage the agreement for its economic growth and trade expansion.
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