India-UK trade deal not feasible before Diwali

SUBHASHIS MITTRA - Wide Angle

The proposed India-UK free trade agreement (FTA) does not appear feasible before Diwali festival barely ten days away as comments made by UK Home Secretary Suella Braverman questioning action over visa overstayers in the United Kingdom has ruffled the Indian government.

As a result, the possibility of meeting the October 24 Diwali deadline for the pact, set by former Prime Minister Boris Johnson, is now fading.

As a corollary, any plans of a UK visit by Indian Prime Minister Narendra Modi to sign off on an FTA is almost unlikely as of now.

The Indian-origin Home Secretary had said in an interview last week that she apprehended that a trade deal with India would increase migration to the UK when Indians already represented the largest group of visa overstayers.

British newspapers have reported that ministers in New Delhi were shocked and disappointed by the disrespectful remarks made by Braverman, who said she had concerns of open borders offer to India as part of an FTA that could boost the UK economy by more than GBP 3 billion by 2035.

“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,” Braverman was quoted as saying.

Asked about visa flexibility for students and entrepreneurs under an India-UK FTA, she said, “…I do have some reservations. Look at migration in this country ... the largest group of people who overstay are Indian migrants."

We even reached an agreement with the Indian government last year to encourage and facilitate better cooperation in this regard. It has not necessarily worked very well, she said.

Braverman was referring to the Migration and Mobility Partnership (MMP) clinched between her predecessor in the Home Office, Indian-origin former Home Secretary Priti Patel, and India’s External Affairs Minister S Jaishankar in May last year.

The Indian High Commission in London responded by pointing out that action had been initiated on all cases referred to it under the MMP.

Though the perception is that Braverman is on a collision course with British Prime Minister Liz Truss, who is keen to clinch the FTA by the Diwali deadline, media reports indicate that both are on the same page on the issue of migration.

However, experts on both sides are now of the view that if the Diwali deadline for the FTA is still met, the result would be a much less comprehensive deal than was expected, leaving key sectors open for future negotiations. UK Trade Secretary Kemi Badenoch seemed to lay the groundwork for this last week, when she said that an FTA with India would not mean that we can't do even more later.

The UK has a close, positive working relationship with India and a thriving trade partnership worth over GBP 24 billion in 2021. “We continue to seek improvements to our current trading relationship, and this is why we are negotiating a high-ambition Free Trade Agreement,” a Department for International Trade (DIT) spokesperson said, but made clear the UK stance that it would not sacrifice quality for speed.

Officials familiar with the negotiations have sought to realign the issue of mobility by drawing a distinction between temporary business visas and long-term migration, saying business mobility is not the same as immigration because business mobility covers the temporary entry for talent to work for a specific time period in a trade partner country. Any commitments on temporary entry will aim to encourage the best and brightest talent in India to temporarily work in the UK, they explained.

India's exports to the UK stood at USD 10.5 billion in 2021-22, while imports aggregated at USD 7 billion. India's main exports to the UK include ready-made garments and textiles, gems and jewellery, engineering goods, petroleum products, transport equipment, spices, pharmaceuticals and marine products. Imports from Britain include precious and semi-precious stones, ores and metal scraps, engineering goods, chemicals and machinery. In the services sector, the UK is the largest market in Europe for Indian IT services.

A trade deal with India, expected to more than double bilateral trade by 2030, is considered a major victory for the new British Prime Minister in an otherwise tumultuous few weeks overshadowed by financial markets turmoil.