Trade agreement with India in the works
Entering into trade agreements is one of the key priorities for UK government after Brexit. The initial discussions with India are due to take place this month (January 2022), when the UK International Trade Secretary travels to India. Trade agreement with India would be a great achievement for the UK government.
India does not have trade deals with US or the EU, and is imposing significant tariffs on imports. Having trade agreement with India would give UK businesses significant advantage over other countries.
Easing UK immigration rules for Indian nationals the price for trade agreement?
According to the information published recently in the Guardian, relaxing immigration rules for Indian citizens is a key demand from Delhi. The UK ministers are keen to ease immigration restrictions. The minister who is likely to oppose such proposals is Priti Patel.
Visa relaxation options under consideration include a scheme similar to one agreed with Australia. The scheme would allow young Indians the right to live and work in the UK for up to three years.
Taking into account how important it is for the UK to enter into trade agreements following Brexit, it is likely that the UK government may agree to ease immigration rules for Indian nationals, assuming that this would allow for the agreement to be signed. However, in our view any relaxation of the immigration restrictions from the British side is likely to be limited to highly skilled/highly talented individuals and/or those who can fill job shortages in the UK. The UK is unlikely to agree to more substantial easing of the immigration restrictions. It is enough to remind how little the UK government has ceded in the Youth Mobility visa scheme, where only 3,000 places for Indian nationals were allocated. On the other hand, the Indian side is likely to have high demands to enter into trade agreement with the UK. Our view is that it may be challenging to reach an agreement between the two sides.