‘MODI PLANS UK VISIT TO SEAL FTA’
Don’t rush deal for Diwali, says peer as business leaders back migration plan
LEADING Asian businessman and peer Lord Karan Bilimoria has said the UK and India cannot afford to rush a Free Trade Agreement (FTA) as reports said India’s prime minister Narendra Modi is headed to the UK later this month to rubber-stamp a deal.
A Diwali deadline for the FTA was set in April when then British prime minister Boris Johnson visited Modi in India. However, multiple media reports in recent days cited visa concessions, data transfer and allowing UK firms to bid for Indian public sector contracts as sticking points.
In an interview with Eastern Eye on Monday (10), Lord Bilimoria said, “I’ve always said we need as comprehensive an FTA as possible. And I would rather have a more comprehensive FTA that is delivered by the end of the year and is of mutual benefit to both the UK and India, than one that is not as comprehensive and is delivered by Diwali.
“This is a big move for India. Let’s put this in context. India has very rarely signed bilateral trade agreements. Until recently, it had fewer than 10 bilateral agreements with countries around the world. They just signed one with Australia and one with the UAE [United Arab Emirates].
“But now is the opportunity to find a big trade deal with a major economy like the UK. The fifth- and sixth-largest economies in the world are now signing a bilateral agreement, which is a landmark for India. It’s got to be as comprehensive as possible.”
There have been some indications that the deadline for concluding the FTA may be pushed to November, and both sides could aim for an early harvest deal to be followed by a comprehensive one.
Sources have told Eastern Eye that a deal serving mutual interests is possible, while there is flexibility around the Diwali timeline.
The festival of lights, celebrated by Hindus, Sikhs and Jains, falls next Monday (24).
The UK trade secretary, Kemi Badenoch, said last week that just because there may be an FTA struck with India now, it did not mean “we can’t do even more later”.
The focus of the ongoing FTA negotiations is on reducing the barriers to trade, cutting tariffs and supporting easier import and export options into each other’s markets.
According to official UK government data, IndiaUK bilateral trade currently stands at around £24.3 billion a year, and the aim is for that to be at least doubled by 2030.
“At the moment, our bilateral trade is scratching the surface, it should be at least double that now,” said Bilimoria. “We set a target, which was even before this FTA, for the enhanced trade partnership (ETP) last year, where we set a target of double that by 2030. I feel it should be multiples of £24bn.
“An FDA can help do that by removing barriers, reducing tariffs, making it easier for companies to do business with each other, making travel easier.
“For example, business people going to India can only stay for 90 days, whereas for ASEAN [Association of Southeast Asian Nations] countries, they can say for 180 days. If we can increase to 180 days, that will help British businesses in India.”
Bilimoria said the movement of people, and especially international students, was “very important”, adding that the UK has targeted one million international students by the end by 2030. The peer spoke of his hope that Indian students should be the highest number among that million.
India has overtaken China as the country with the highest number of student visas issued for higher education institutions in the UK. Foreign students pay higher fees than UK nationals and are a key contributor to the British economy.
Home Office data shows around 118,000 Indians received a UK student visa in the year ending June 2022 – an 89 per cent rise from the previous year.
In 2020, Indians were also granted more sponsored skilled-worker visas than any other group.
More than 32,000 Indians were the largest foreign group working in the NHS, second only to Britons themselves. And in the IT sector, nearly three in five visas went to Indians.
“Indian employees, students and tourists bring in a lot of revenue to this country. International students bring in £26bn to our economy, which is phenomenal,” said Bilimoria.
“India is one of the largest investors in the UK. If you look at the Grant Thornton tracker report, you see the billions of pounds of turnover of Indian companies, the number of employees here; the amount they contribute to our taxes is huge.”
However, home secretary Suella Braverman has, in recent days, expressed concern over what she feared would be an “open borders” migration policy with India. She also claimed Indians were the “largest group who overstay” their visas in the UK.
“The UK cannot have an open border with any country. There is no question of any open border in that sense,” said Bilimoria.
“The most comprehensive modern free trade agreement in the world, if you ask me, is the one we signed with Australia. In that there is a threeyear youth mobility plan for 18- to 35-year-olds between both countries.
“This encourages young people to work and experience each other’s countries, quite apart from study. That’s not open borders. This increase in mobility we can have between the UK and India, especially for young people, which the previous home secretary (Priti Patel) spoke about, would be a good thing.”
Bilimoria also refuted Braverman’s claims that Indians were the largest number of overstayers. He argued that when compared to other countries, only a “small minority” of Indians overstay their visas in the UK.
The migration of workers from India is also seen as a way to address Britain’s staff shortages which currently has 1.3 million vacancies, roughly twice the average number seen during the last decade. The rise in vacancies has been highest in jobs that relied most heavily on EU workers pre-pandemic, such as hospitality and warehouse and transport workers.
Hotelier Surinder Arora told Eastern Eye that labour shortages were a “disaster” and bringing migrant workers to the UK was a solution.
“There’s no harm if the UK government was to issue working visas for people to come in on a threeor five-year visa. Even if they leave that responsibility to both employee and employer – that they have to have accommodation arranged between themselves – I have no issue with that,” he said.
“They also have to make sure the employee has to have private medical cover so they don’t rely on the NHS. And they have a guaranteed job. If someone’s got a job, earning money, paying taxes and got private healthcare and accommodation, surely that’s going to be a win-win situation.” Mobility and migration are one of the “challenging aspects of the agreement”, according to Amarjit Singh, CEO of the Indian Business Group (IBG) and special adviser to the University of Southampton. He described the home secretary’s comments as “offensive”.
“Her comments have been seen as unhelpful and inappropriate, and to some extent offensive, particularly given that we are in the middle of advanced negotiations for a comprehensive free trade agreement, within which mobility is being agreed and negotiated,” Singh told Eastern Eye on Monday (10).
“It’s counter-productive. It’s a distraction from the ultimate goal of the FTA which is to accelerate economic growth and unlock fresh business opportunities. Now people are at the very heart of that and I think you do really need a kind of positive projection of what the government’s stance is on the matter, rather than having unhelpful comments on specific areas, which are obviously sensitive.”
Bilimoria recalled that former UK prime minister Theresa May, while on an official visit to India, went against the advice of her team and brought up the issue of overstaying Indians. “It did not go down well,” he said. “We need to rebuild our bridges with a country that we have a very, very strong relationship with. It doesn’t help to build bridges talking about overstaying Indians.”
Singh said while “huge progress” has been made since the negotiations commenced in January, “it still remains a “balancing act” as a number of issues had yet to
be resolved.
He said: “One of the big things cropping up is movement of data between both countries, which would obviously help facilitate greater volumes of trade and investment. To achieve that, you need close alignment on data regulations and sufficient legal protections, which both nations would recognise, to support cross-border data transfer.
“India remains the second-largest foreign direct investor in the UK and telecoms is a huge part of that. But I think the trend at the moment on digital seems to be going higher up the food value chain in offering more sophisticated services, which was one of the really exciting components of the free trade agreement, given London’s position as both one of the world’s leading financial but also legal hubs.
“At a basic level, India wants to boost exports in things like textiles, garments, clothing, jewellery, and, of course, pharmaceuticals. With India being described as the pharmacist to the world and we saw paracetamol and other medicines coming over during the pandemic.”
Arora said the UK should take advantage of the fact that India has cultivated some of the brightest technological minds in the world in recent times. “I don’t think we should discount what India can add to the UK,” he said. “You have a lot of bright people in India. India is going places, it is going to be one of the strongest nations on the planet. If you look around the world, whether it’s business people or CEOs, they are originally from India. They have very well-educated, very smart people. There’s no reason why the two nations can’t be working closely. I think they will add value to
each other.”