Rishi Sunak, the Prime Minister of the United Kingdom, has embarked on a significant visit to India in conjunction with the G20 Summit. This visit holds the promise of breathing new life into the prolonged discussions surrounding the India-UK Free Trade Agreement (FTA). The FTA, which has faced various challenges, may find renewed momentum as Sunak meets with Indian Prime Minister Narendra Modi.
Complex Issues Stalling FTA Talks
The India-UK FTA negotiations have grappled with intricate matters encompassing visa regulations, migration policies, Scotch whisky, pharmaceuticals, and taxation. These multifaceted topics have posed significant hurdles in reaching a consensus.
Visa Rules and Migration Policies: India, characterized by its youthful population, emphasizes seeking relaxed visa rules, particularly for students and professionals. Conversely, the UK’s Home Office, responsible for immigration and visas, has historically leaned toward stricter immigration policies.
Taxation and Pension Benefits: India has also advocated for tax exemptions for its professionals, especially in the IT sector, who reside briefly in the UK and miss out on pension and social security contributions. This issue is intricate, given London’s traditional stance of not extending such benefits to foreign citizens. Nevertheless, in light of the UK’s post-Brexit vision, some concessions might be on the horizon.
Promising Signs for India-UK Trade Relations
In recent years, Indian corporations have made substantial inroads into the UK across diverse sectors, including pharmaceuticals, information technology, steel, education, and entertainment. Well-known Indian figures in the UK corporate landscape, such as the Tata Group, Hinduja brothers, Lakshmi Mittal, and Lord Swaraj Paul, have solidified this presence.
Moreover, Indian-origin billionaire brothers Mohsin and Zubair Issa made headlines by acquiring a majority stake in ASDA, one of the UK’s largest supermarket chains, in October 2020.
The upcoming discussions between Rishi Sunak and Indian industrialists during his visit hold the potential to not only strengthen trade relations but also provide a much-anticipated breakthrough in the India-UK FTA negotiations.
As Rishi Sunak visits India for the first time since becoming Prime Minister, accompanied by his wife Akshata Murthy, the trip may include a visit to Delhi’s Akshardham temple. Beyond diplomatic exchanges, discussions with Indian business leaders are anticipated to feature prominently.
In sum, the visit of UK PM Rishi Sunak to India, marked by its potential to revive FTA negotiations and foster deeper economic ties, underscores the growing significance of India-UK relations in the realm of international trade.
