LONDON: UK international trade secretary Anne-Marie Trevelyan is expected to travel to New Delhi this month to begin negotiations on a UK-India free trade deal where she is expected to open talks with a generous offer on UK visas for Indians.
The easing of immigration rules for Indian citizens travelling to Britain has long been a demand of New Delhi, and with acute labour shortages in Britain, particular of doctors and nurses, it now offers a win-win situation for the UK which at the same time is keen to get access to the lucrative Indian market.
The Times of London reported Saturday that the UK is now prepared to offer a generous deal on visas to secure the trade deal, citing UK government sources.
Commenting on this, a senior Indian diplomat in London said: “Nothing unexpected in the news”. Another source told TOI that the free trade agreement (FTA) is expected to be announced this year by UK PM Boris Johnson when in India and before any EU-India FTA is agreed.
Relaxations could include lower visa fees for students and tourists, visas for young Indians to work and travel in Britain, a longer graduate route visa and visa-on-arrival for certain Indians.
The benefits of a UK-India trade deal to Britain would be reduced tariffs on a range of goods, giving UK manufacturers more affordable access to the important Indian market.
Post-Brexit the UK is in active pursuit of FTAs.
India by contrast has been less inclined to signing preferential trade deals as seen by India’s withdrawal from the Regional Comprehensive Economic Partnership (RCEP) and the eight-year stagnation of EU-India negotiations. India wants to protect its economy from foreign competitors and maximise domestic production.
Analysis by the UK Department of International Trade (DIT) shows a trade agreement with India would boost the economies of all regions of the UK, as they already have substantial ties in India and stand to benefit from India’s economic growth.
India currently charges huge import tariffs of up to 150% on some of the UK’s most important exports, such as cars and whisky.
An FTA that removes or reduces these taxes would make UK goods more competitive in the Indian market. The trade deal would also provide an opportunity to deepen cooperation between the two countries’ respective services sectors.
A DIT spokesperson said: “India is projected to become the world’s third-largest economy by 2050 and a free trade agreement will open up huge opportunities for UK businesses to trade with India’s £2.25 trillion economy.”
Kevin McCole, UKIBC managing director, said: “From extensive UKIBC consultations it is clear that businesses in both countries, across all sectors, have high hopes for the FTA negotiations. Business want to see a reduction in tariffs, plus greater alignment of standards and of IP and data protection rules so as to realise the full potential of the India-UK partnership, particularly in the innovative, R&D-intensive sectors that will drive the partnership in the years to come. Businesses are also interested in an interim, or early harvest deal.”
Pratik Dattani, MD of market entry consultancy EPG, said: “The UK government seems to have signalled it is willing to offer much of what India wants, without India signalling it will provide much in return. The UK needs a big post-Brexit deal, so the stakes are higher for Britain than for India.”
Lord Karan Bilimoria, president of the Confederation of British Industry, said he was “excited by the prospect of FTA talks with India beginning in earnest this year”. Exporting and growing international revenue needs to be a priority for the UK, he said.