2023 G20 Summit: What to expect from Rishi Sunak's first visit to India since becoming UK PM

Rishi Sunak and Akshata Murty are likely to visit the Akshardham temple while they are in Delhi for the G20 Summit. (File)

In 1903, the UK imported over 14 percent of the total wheat and wheat flour from India. From being a negligible supplier – in 1872, it was nought – in the last three decades of the nineteenth century, India rose to become the second-largest wheat supplier to the UK, after the US. None of the European countries figured in the top 5 list, with Russia being joint second with India. It was, of course, the days of the British Raj and different dynamics were at play, but in the post-colonial (and Brexit) era, at the heart of London’s engagement with New Delhi on Free Trade Agreement (FTA), is the imperative to show that countries outside the EU can be meaningful and long-term trading partners. The 13th round of discussions on the India-UK FTA are scheduled for this month.

Now that Rishi Sunak has landed in India for the G20 Summit, his meeting with the Indian Prime Minister Narendra Modi will provide an impetus to finalize the FTA for which talks have been ongoing for a fairly long period. After the debacle of announcing a deadline of Diwali 2022 for the signing of the FTA, both the sides have now judiciously avoided putting any sort of timetable. Simplification of visa rules, migration policies, Scotch whisky, British cars, pharmaceuticals have emerged as some of the key sticking points between both the sides. These have been knotty enough to not allow the FTA agreement to be ready during the G20 summit, which would have given it an added spectacle, although optimist voices in the British government have been making it known that a deal could still be reached by the end of 2023.

A high percentage of young people in India's population means that New Delhi is keen to extract the fullest possible concessions allowing greater mobility for students and professionals, certainly on par with any other country. This has meant that while the UK’s education sector and its ministry of education have been enthusiastic about the possibility of greater number of international fee-paying Indian students, the UK home office has consistently made different noises. As migration and visas ultimately fall under the ambit of the home office, and the home secretaries, including the incumbent, have traditionally pandered to the Tory Right, the larger objective of the ministry has always been to keep migration numbers down. In May 2023, the UK home office announced that from January 2024 foreign postgraduate students on non-research courses will not be able to bring family members to the UK.

But much steam has been taken out from the narrative that India wants more visas as part of the FTA deal, when Vikram Doraiswami, Indian High Commissioner to the UK, told The Times Radio on Thursday (September 7) that reports in the UK media about India demanding more visas for its nationals were not entirely correct. “What we have been asking for is simplification of the process by which inter-company transfers happen. That is basically your (British) companies that have invested in India and our companies of which I might point out there are somewhat larger number that have invested here - 950 of them - find it easier to move Indian and British nationals between each other countries as part of free trade deal,” said Doraiswami.

India has also sought tax breaks for Indian professionals, especially in the IT sector, who do not remain long in the UK and lose out on the contributions they make to pensions and social security. This could be a thorny issue as London has not generally given such benefits to other nationalities. But given the fact that Brexit-votaries envisaged making the UK attractive for Asian chefs, IT professionals, and medical staff from around the world, it is only natural that India makes such demands. There are in fact indications that the UK might be able to give some sort of concessions on this front.

In March 2023, the Bar Council of India announced that overseas firms would be able to open offices in the country. This news was received with much enthusiasm by British law firms who have been looking for long to operate in cities like Mumbai, Delhi and Bengaluru. However, much confusion and ambiguity remain over regulations which indicates that there is a long road before global law firms could see the desired level of engagement.

“The UK is very keen to secure a deal with a fast-growing economy like India which has future growth potential and already has overtaken the UK in GDP. For India, FTA with the UK would help expand exports and create more jobs. A win-win for both the countries where the true trade potential is yet to be realized,” said Deepak Lalwani, chairman of Lalcap Ltd, a London-based consultancy specializing in UK-India investments, to Moneycontrol.

This is the first time that Sunak is in India after becoming the UK Prime Minister. He is accompanied by his wife Akshata Murty and the couple is expected to visit the Akshardham temple in Delhi. Apart from meeting world leaders, Sunak will also hold discussions with Indian industrialists.

Over the years, Indian companies have seen a greater presence in the UK, in sectors as varied as pharma, IT, steel, education, and entertainment. The Tata group, Hinduja brothers, Lakshmi Mittal, Lord Swraj Paul, are well recognized in the UK corporate world. In October 2020, the Indian-origin billionaire brothers Mohsin and Zubair Issa bought a majority stake in ASDA which is one of the biggest UK supermarket chains employing more than 145,000 people. The Pune-headquartered Serum Institute of India helped rollout UK’s successful Covid vaccine programme partnering with University of Oxford.

The days of India being an exporter of raw materials and food grains is far over. Over a century ago it was the second-largest supplier of wheat to the UK, but in 2019, India became the second-largest source of foreign direct investment in the UK, after the US.