India-UK trade ties muddled by Immigration Issues

UK Prime Minister Theresa May on her three day visit to India attempted to reinvigorate Post-Brexit trade ties with India. The visit was particularly significant since it is May’s first bilateral to a country outside European Union after taking over as the Prime Minister of UK. Wadding through the challenging road of Brexit, Britain was determined to forge close diplomatic and economic relations with countries outside the EU. Reiterating Britain’s commitment to free trade, May called for strengthening bilateral trade relations.

Post-Brexit political establishment vouched to forge ties with Common Wealth Nations. Paradoxically, May resorted to hard bargaining wherein, she wanted to have maximum leverage from trade ties but willed to impose tough restrictions on visas to Indians. May was keen on issuing preferential visas to High Net worth Individuals in exchange for investments. May in her six year, long stint as the Home Secretary, pursued a hardline on immigration policy. During her tenure, Home Department resorted to nasty tricks of hiring vans carrying “Go Home” banners which would tour Indian-dominated areas targeting the illegal migrants. She was also instrumental in stiffening immigration laws. Earlier UK was one of the favored destination of India students for higher studies. The stringent immigration policies like sharp increase in visa fees, denying right to work for graduates after finishing degrees have deterred Indian students. Even the study visas to Indian nationals have come down steadily from 68,238 in 2010 to 11,864 by 2015 (1). Universities have registered 35% decline in Indian students. Still May defiantly argued for cutting down the number of foreign students altogether. May’s visit comes at a time when government officially raised the annual salary thresholds from £20,000 to £30,000, further sealing the prospects of people to people movement. Indian business executives are seriously perplexed with these conflicting signals. In a drive to bring down the net immigration down, Britain is now all set to scrutinize the applications of Indian students. This approach might prove counterproductive to UK’s ambitions of reversing the vagaries of economical debacles entailed by the Brexit. India is the second largest global creator of jobs (created over 1,10,000 jobs in UK) and the third largest source of FDI. As a matter of fact, India-EU agreement was paralyzed by immigration issues.

Indo-UK bilateral relationship was elevated to Strategic Partnership in 2004 and was strengthened in 2010 by Prime Minister Cameron who laid foundation for an Enhanced Partnership for future. Cameron infused momentum into bilateral relations and made congruent efforts to change the traditional approach of Britain towards India, which was a former colony. Bilateral ties reached a crescendo when Prime Minister Modi on his visit to UK signed deals worth £9 billion last year before Brexit. Brexit has changed the atmospherics of the trade investments. Britain staring at the prospect of losing access to European Markets is keenly looking forward to forge business ties with emerging markets and India as the fastest growing emerging market is an obvious choice. India in turn hopes to gain from Britain, leaving the EU.

On her visit, Prime Minister Modi and May jointly inaugurated the Indo-UK Tech Summit at New Delhi hosted by Confederation of Indian Industry (CII) and Department of Science and Technology (DST). Both leaders reiterated that India and UK are natural partners, for the foundation of bilateral relationships are strengthened by shared history, shared connections and shared values.  Modi then stressed on the issue of visas for students. He said “Education is important for our students and will define our engagement in shared partnership. We must therefore encourage greater mobility and participation of young people in education and research opportunities”. In reply May who was keen on satisfying the voters back in UK by safely guarding Britain’s borders didn’t blink. Instead she announced easier “Registered Travellers Scheme” for Indian businessmen and onsite Indian workers. She emphasized that the flexibility with visas for Indians solely depended on “speed and volume of the return of Indians with no rights to remain”. Indian officials later clarified that India would indeed take back people who are entitled to but not all the people in the list of “overstaying migrants”. She said “We want to attract more Indian businesses to UK, which is why it is right to offer Indian business executives a world-class visa service tailored to their needs”. Due to disagreement over visas, her delegation failed to arrange a meeting with high-level officials of Tata Group. Around 4000 workers at Tata steel plant, Port Talbot, South Wales face an uncertain future as the company has announced to sell all or part of the business.

UK is the largest G20 investor in India and to accelerate trade ties, a “working group” was set up. Business deals worth over £1 billion were signed. May announced that India plans to list four “masala bonds” of £600 million in London next three months. Both sides signed MoU for increasing cooperation in ease of doing business and intellectual property rights. India asked UK to expedite the extradition of 57 people including Vijay Mallya and the Christina Michel, alleged middleman in Augusta Westland case. Britain pledged to invest £160 million across 75 start-up ventures to create jobs and additional £20 million for start-up India venture capital fund. May complimented India International Solar Alliance (ISA) initiative and expressed UK’s intention to join the alliance. Both leaders announced new research partnerships £80 million including a new Joint Strategic Group on Anti-Microbial Resistance (AMR). They launched India-UK Clean Energy R&D center with focus on solar energy storage and integration with joint investment of £10 million. Both sides tasked the Defence Consultative Group (DCG) to take lead in charting areas for enhancing defence cooperation.

May extended support to India’s pitch for permanent membership at extended UNSC and NSG membership. Both sides agreed to deepen cooperation on countering terrorism, radicalization, violet extremism and cyber security. She condemned 26/11 and terror attacks on Uri and reiterated that Pakistan must bring perpetrators of the attacks to justice. India welcomed UK- initiated joint statement on Preventing Violent Extremism launched at Global Countering Terrorism Forum at New York.

Though May stressed that India shouldn’t wait for the Brexit to complete for stepping up trade, India is more cautious. Just days before her visit to India, May lost court case over Parliament’s role in Brexit. While May was in tearing hurry to initiate the process of leaving EU, court ordained her to consult Parliament before starting any negotiations. She fears this might slowdown and eventually dilute her plans. Back home £4 billion worth curry industry described May’s visit to India as “shambolic” and criticized her hardline stand on immigration as “damaging” to UK’s economy. Unlike her predecessor Cameron, who kowtowed to China, May first visited Delhi to change that image. But sadly her inclement immigration stance muddled it all.

  1. http://www.bbc.com/news/business-37891734

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