- BY Ian Robinson
India Free Trade Agreement: negotiators should prioritise time and cost ahead of more visas
Rishi Sunak’s visit to Delhi for the G20 has prompted more reporting on the UK India free trade agreement, where negotiations have apparently been slowed down by Indian requests for more visas. I worked for the Home Office between 2003 and 2011 and as an Assistant Director covered policy relating to free trade agreements and mode 4 provisions, so this is an area of particular interest to me.
Visa policy will definitely be on the table in the discussions but I would be surprised if India’s negotiators want vastly increased numbers, given that 157,771 Indian workers and their dependants were granted visas for the UK in the year ending June 2023. The conversation is much more likely to be about making it cheaper and faster for people to get here.
What will India ask for?
For immigration professionals, it is worth thinking about how visas are catered for in trade deals. The easiest point of reference is mode 4 of the General Agreement on Trade in Services which serves as the general template for any potential immigration provision within a trade deal. When we think about mode 4, we tend to look at four categories of people moving:
- contractual service suppliers;
- independent service professionals (e.g. self-employed, freelancers, independent consultants);
- business visitors; and
- arrangements for specialists and managers.
I’m going to quickly dismiss the first two categories. The provisions made for both contractual service suppliers and independent service professionals normally grant an entry of up to six months to allow for the provision of services to a contract within the terms of the respective, tightly defined, professional roles. The UK already caters for both categories by compliantly but narrowly implementing those requirements in various free trade agreements. That implementation is so narrow that in practice the categories are almost never used. I’ve probably needed to look at them a dozen times in over ten years and only used them once or twice. There is no harm in catering for them, but they shouldn’t be a negotiating priority.
Business visitor provisions are more interesting but I doubt there will be much movement there. There are various ways that business travel rules could be improved for overseas businesses, whether by increasing the list of allowable activities or removing it all together to let very short-term visitors take on any activity. The Indian authorities might also want their visitors to be given visa free access to the UK. I can’t see either happening though, not least because the UK hasn’t made any changes in other free trade agreements and probably won’t here either. I’d be delighted if they were to, but that seems unlikely.
It would make more sense for negotiators to concentrate on regular work permit categories and there are three potential areas to cover:
- Visa processing times. The UK issues visas quickly compared to other countries but the steps leading up to an application can slow things down.
- Fees. Visa fees alone are internationally competitive but the skills and health charges are substantial. Negotiators would have the biggest impact if they can speed things up and push costs down.
- Visa requirements. The UK has relatively few requirements but there is scope to offer concessions.
On fees, I expect they will be pushing hard for the £1,000 per year immigration skills charge to be removed for Indian Senior or Specialist Worker visa applicants, previously known as the Intra-Company Transfer visa. The UK’s default line is probably that the immigration skills charge is an important source of revenue for training resident workers but there could be movement. EU nationals have been exempt from the charge since 1 January 2023, so there is precedent.
There were 10,811 Senior or Specialist Worker visa applications from Indian nationals in the year to 31 March 2023. They will typically be granted for between one and three years, suggesting a saving of between £11m and £33m for Indian businesses. That saving would at least double if applied to the more popular Skilled Worker visa category but the UK didn’t concede the charge for EU Skilled Workers so probably won’t for India either.
On requirements, I’d be very surprised if Indian negotiators are not pushing for that English language requirement to be removed or, probably more palatably for the Home Office, for employers to be able to self-certify English language competency. That is not a typical solution for immigration provisions in a trade deal as set out in mode 4 but it could be a big win for Indian employers.
Right now the Senior or Specialist Worker category only really makes sense if you need to move a person really quickly and they don’t qualify for Skilled Worker because of the English language requirement. If that were to change and Skilled Worker becomes about as fast as Senior or Specialist Worker, it could save Indian businesses £10,000 in salary per person moving, per year. If every Senior or Specialist Worker then moved to Skilled Worker, that would be a £100m saving (and probably make changes to the skills charge unnecessary).
Conclusion
It remains to be seen whether the government would be willing to do any of this, or indeed if I am right and it this what is being asked for. I’d have thought that changes to the immigration skills charge are possible, given that the EU already has that benefit.
A liberalisation of English language requirements will be tougher and the Home Office would, I expect, push back because of the risk, real or perceived, that the wages of UK workers would be undercut. The Department for Business and Trade or even the Foreign, Commonwealth and Development Office might too.
The policy wouldn’t just mean that Indian businesses save money when they send people to the UK. It would mean that they can get their people here a few weeks or even a few months quicker than employers in competitor countries, for three quarters of the price. But whatever happens, it does seem likely that there will be a lot for immigration professionals to think about when they are advising their clients.
This article was written with support from Stephen Purdy, Vialto Senior Associate.
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