The United Kingdom (UK) is not keen on providing easier mobility norms for India's services industry, a demand that New Delhi is seeking as part of the proposed Foreign Trade Agreement (FTA) between the two nations.
While India wants easier visa norms for its companies in the services sector that function out of Britain, the UK has been reluctant given migration concerns.
"We (India) are saying that our services companies if they go and operate there (UK), they can only do so if they can take people there or hire people there, so the visa regime should be such that it helps them to do so," a senior Indian government official said.
The UK, on the other hand, is worried about easing visa restrictions, since it could lead to more migration.
"They argue that post-Brexit, migration concerns have to be addressed. Now, Rwanda has also become an issue. We have to balance their migration concerns with our mobility concerns. We would like our companies to have mobility so they perform there and they don't want migration to stay unchecked. So we have to balance both," the official added.
UK Prime Minister Rishi Sunak earlier this week was able to push through a bill in the lower house of Parliament, which proposes to send some asylum-seekers back to Rwanda as the UK looks to clamp down on migration. Apart from this, London recently announced a five-point plan to reduce immigration, which included a hike in the minimum salary required for skilled overseas workers.
Thus, Sunak's government's intent to curb migration has now made it difficult for India to push through their demand for easier mobility norms in the proposed trade deal between them.
The FTA between India and the UK, originally slated for Diwali 2022, is yet to be clinched as the two sides continue to negotiate on a few unresolved issues, including Rules of Origin, London’s demand for tariff concessions on electric vehicles, and norms about services. There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights.
Elaborating on outstanding issues, the official said that India is mulling Tariff Rate Quotas (TRQ) to meet the UK's demand for a reduction in import duties on electric vehicles from Britain as part of the trade deal. The two sides are also still discussing Britain's demand for an import duty cut on its whisky.
A TRQ allows a lower tariff rate on imports of a given product up to a specified quantity. New Delhi is said to be considering a concessional tariff of 30 percent on 2,500 electric vehicles imported annually from the UK priced above $80,000.
Commerce Secretary Sunil Barthwal on December 15 said that negotiations for the FTA between India and the UK are in its "last leg". The 13th round of negotiations that started on September 18 is still ongoing and an Indian delegation is in Britain for the same, he added.
Moneycontrol on November 23 reported that with a few months left for general elections, India is hoping to conclude talks for the long-pending FTA with the UK by January 2024. This is seemingly an attempt to ensure there are no pauses in exchanges between the two sides.
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