India–UK Trade Talks: Strategic Wins Beyond Visas

A significant milestone has been reached in the ongoing trade negotiations between India and the United Kingdom. A Free Trade Agreement (FTA) between the two nations is drawing nearer to completion. These discussions are crucial for facilitating commerce and opening up new opportunities for companies in both countries.

One part of the talks that has been tricky for months is about visas. India had hoped for more visas for its skilled workers, especially those in IT and healthcare.
However, it seems India has accepted that Britain will make only small changes to its visa rules for now. According to UK officials, the new rules will offer around 100 new visas for Indian workers each year. This figure is much lower than what India first asked for.

The UK Home Office has been careful about giving out more visas. This is mostly due to their worries about the potential impact on the UK’s overall net migration figures.

While the number of new visas might seem small, a UK official mentioned that the visa policies resulting from the deal will provide businesses with much-needed “certainty”. Predicting the exact number of Indian workers who will benefit from these changes is difficult, with one official calling such attempts “purely political”.

But here’s the interesting part, and perhaps the real story behind the headlines: India isn’t just focusing on visas. It appears India is playing a “strategic long game”.

India is pushing hard for other important concessions. One major area is getting exemptions from the UK’s planned carbon tax. This tax is expected to be placed on imports with high carbon emissions, like steel, aluminium, and cement, and could make it harder for India to sell these goods in the UK. India argues that once a trade deal is in place, there should be a fair playing field.

Another key ask from India is for a way for Indian workers on short-term visas – typically up to three years – to get a refund on their pension contributions made in the UK. India’s High Commissioner in London explained that India is seeking an arrangement like the UK has with other countries. This would allow Indian workers who are already paying into a pension scheme back home to be exempted from contributing to Britain’s system during their temporary stay. For India, it feels unfair that workers are “double-taxed” without benefiting from the UK system.

India’s chief trade negotiator, Piyush Goyal, recently visited London for high-level talks to help fast-track the FTA. He met with his UK counterpart, Jonathan Reynolds. Mr. Goyal stated that the discussions are a step towards helping both countries handle challenges in the current global trade climate.

The talks are in their final stages. Beyond the carbon tax and pension contributions, other issues like India’s tariff on Scotch whisky and duties on automobiles are still being discussed, though a compromise on the whisky duty seems likely.

A spokesperson for the UK’s Department for Business and Trade said the government is “committed to doing the right deal with India” to improve access for UK businesses, cut tariffs, and make trade “cheaper and easier”.

It’s interesting to note that according to certain sources, the UK side—specifically, the Department for Business and Trade—sounded more optimistic about the deal’s proximity than the Indian side.

So, while the visa part of the deal might seem modest, India appears to be prioritising other significant economic gains. These efforts are seen as part of rewriting the rules for how mobility, migration, and trade work together in today’s world. Ultimately, the FTA is viewed as vital for boosting trade relations and opening new doors for businesses in both countries.

As the commercial connection between India and the UK continues to develop, new opportunities for firms and qualified workers are opening up.

Now is the moment to educate yourself whether you are a company owner or professional trying to figure out how these changes could impact you or how to take advantage of the prospects in the UK.