LONDON — India has accepted that Britain will only offer minor changes to its visa regime as negotiations for a trade deal enter their final stages.
The new rules will lead to around 100 new visas for Indian workers each year, a U.K. official told POLITICO.
Ministers have said that securing a free trade agreement with India is a key economic priority, but with Nigel Farage’s Reform party targeting voters in Labour heartlands, negotiations over visas for foreign workers are politically sensitive.
The U.K.’s visa concession is a long way from New Delhi’s opening gambit, the U.K. official said, with India originally proposing larger quotas for professionals, particularly in sectors like IT and healthcare.
The mobility chapter of the deal — meant to smooth the way for more inter-company transfers — has been finalized in recent weeks.
It is “not possible to put a number on” how many Indian workers the provisions in the chapter will bring into the U.K., a person close to the negotiations said, arguing that it’s purely “political” to put a figure on it.
But the chapter will give firms “certainty” about the U.K.’s visa regime, which has been tweaked multiple times in recent years, they added. Like others quoted in this story, they were granted anonymity to speak freely as negotiations continue.
India’s chief trade negotiator Piyush Goyal will push Keir Starmer’s government to go further on other aspects of the negotiations when he visits London this week.
He is expected to ramp up pressure in talks calling for carve-outs from the U.K.’s nascent tax on high-emissions imports and proposals for Indian firms to be able to claw back payments to Britain’s state pension pot for those on short-stay visas.
“Interestingly, it’s [the U.K. Department for Business and Trade] rather than the Indian side sounding more positive about the deal being close,” said a third person close to the talks. “Previously the Indians were getting way ahead of themselves.
The new rules would be enforced by the Home Office, which has been resistant to allowing any significant visa exemptions due to the effect on net migration figures.
A spokesperson for the U.K.’s Department for Business and Trade said: “This government is committed to doing the right deal with India which will improve access for UK businesses, cut tariffs, and make trade cheaper and easier.”
“Talks have been ongoing since they were re-launched in February, and we will only sign a deal that is in the best interests of the British people and drives growth across the UK.”
‘Step change’
After U.K. Trade Secretary Jonathan Reynolds visited Piyush Goyal in Delhi to re-launch negotiations earlier this year, U.K. officials told British firms about a “step change” in India’s willingness to make concessions, a senior business representative said.
Amongst British officials “there’s a sense that the Indian government just wants to get something done and over the line now,” they said, pointing to U.S. President Donald Trump’s global trade war as the impetus. “You need the extra trade growth from wherever you can get it,” they said.
Trump’s trade war, however, won’t see India rushing into a deal with the U.K., India’s Finance Minister Nirmala Sitharaman said in London early this month during a key economic dialogue with Chancellor Rachel Reeves. “It is not as if we’re rushing into a U.K. [free trade agreement] because something is done by Trump in the U.S.,” Sitharaman said.
Delhi’s top diplomat in London, Vikram Doraiswami, set out that India is aiming to secure concessions from the U.K. on a so-called “Double Contribution Convention,” allowing firms employing Indians on short-stay visas of up to three years to claw back payments into Britain’s public pension pot.
“Essentially, what we’re really looking for is something that you have with other countries which allows people who are already paying to their pension pots back home in India [to] be exempted for the period of their stay here,” Doraiswami told Times Radio earlier this month, adding “that amount is in negotiation” with the U.K. government.
Carbon border challenges
India has presented “some new concerns that have come up over [the U.K.] carbon tax, which will certainly have some implications for us,” Shashi Tharoor, chair of the Indian parliament’s committee on external affairs, told POLITICO.
The U.K. is currently in talks with the EU to align its Carbon Border Adjustment Mechanism (CBAM) expected in 2027 with a similar tax in Brussels on high-carbon emission imports like steel, aluminum and cement. The measures would see Indian commodities face steep duties at the border.
Progress to align the systems in London and Brussels is expected at a key U.K.-EU summit on May 19.
Goyal has repeatedly attacked the tax, warning it “is going to cause the death knell of manufacturing in Europe.” He is set to also press Brussels on the issue when he visits at the end of this week to continue talks for a trade deal with the EU following his London stop.
“We need some clarification on your carbon border tax on steel and cement, because steel and cement will be important for us to sell you,” Tharoor said.
“You can’t have measures that tilt the playing field against me after you come up with a trade deal,” High Commissioner Doraiswami said.
“Once you have a trade deal, there must be an even playing field for both sides,” he added. “We’ve made excellent progress in bringing the deal into the last few percentage points in negotiations of goods and services.”
As Trump’s trade war continues, getting a U.K.-India deal “has gone up the scale in terms of political priorities,” said Tharoor. “We all need buffers against the global trade uncertainties that have suddenly shot up in people’s consciousness.”
Sealing it “requires a lot more flexibility on both sides,” he said.
