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Optimizing the UK-India Free Trade Agreement: Prioritizing Efficiency and Cost-Effectiveness over Visa Expansion

Bhavini Bhatt
Posted on Mon Oct 2
5 min read

Rishi Sunak’s recent visit to Delhi for the G20 summit has reignited discussions surrounding the UK-India free trade agreement. Reports have suggested that these negotiations have hit a stumbling block due to India’s expressed interest in obtaining more visas. Drawing from my extensive experience at the Home Office between 2003 and 2011, where I specialized in policy related to free trade agreements and mode 4 provisions, this subject matter holds particular significance.

While visa policies will undeniably be a central element of these discussions, it would be somewhat surprising if India’s negotiators were primarily seeking a substantial increase in visa allocations. This is mainly due to the fact that in the year ending June 2023, a total of 157,771 Indian workers and their dependents were granted visas to the UK. Consequently, the focal point of these negotiations is likely to revolve around streamlining the visa application process and reducing associated expenses.

So, what can we anticipate India will request?

For professionals in the field of immigration, it is crucial to understand how visas are addressed within trade agreements. The foundational framework for immigration provisions in such agreements is typically found in mode 4 of the General Agreement on Trade in Services. This framework categorizes individuals into four distinct groups when it comes to cross-border movement:

1. Contractual service suppliers.

2. Independent service professionals (such as self-employed individuals, freelancers, and independent consultants).

3. Business visitors.

4. Arrangements for specialists and managers.

The first two categories, contractual service suppliers and independent service professionals, traditionally permit stays of up to six months to facilitate service provision within the confines of their specific professional roles. However, these categories have seen limited practical use, and therefore, their inclusion should not take precedence in the negotiation process.

While business visitor provisions present more intriguing possibilities, significant changes may be unlikely. Potential improvements might encompass broadening the scope of allowable activities or even allowing very short-term visitors to engage in a wider range of activities. Though the Indian authorities might seek visa-free access for their visitors, the prospects for such changes seem dim, particularly considering the UK’s historical reluctance to enact such measures in previous trade agreements.

Consequently, it would be prudent for negotiators to place their focus on standard work permit categories, specifically concentrating on three key areas:

1. Visa processing times: While the UK boasts a relatively swift visa issuance process, procedural steps leading up to the application phase can often create delays.

2. Fees: The visa fees themselves are internationally competitive; however, charges related to skills assessments and health checks can be quite substantial. Therefore, the most significant impact in negotiations could be achieved by expediting processes and reducing overall costs.

3. Visa requirements: The UK currently maintains relatively minimal visa requirements, leaving room for potential concessions.

Regarding fees, it is conceivable that negotiators will advocate for the removal of the £1,000 per annum immigration skills charge for Indian Senior or Specialist Worker visa applicants (formerly known as the Intra-Company Transfer visa). The UK’s default stance may be that this charge is essential for generating revenue to support the training of resident workers. Nonetheless, there exists a precedent, as EU nationals have been exempt from this charge since January 2023.

In the period ending March 31, 2023, there were a total of 10,811 Senior or Specialist Worker visa applications submitted by Indian nationals, typically granted for durations ranging from one to three years. This suggests potential savings in the range of £11 million to £33 million for Indian businesses. Should this exemption be extended to the more popular Skilled Worker visa category, the savings could be even more substantial.

Regarding visa requirements, it would be surprising if Indian negotiators did not push for the removal of the English language proficiency requirement or, perhaps more palatably for the Home Office, the ability for employers to self-certify their employees’ English language competency. While such a solution does not align with the typical provisions found in trade agreements, as outlined in mode 4, it could represent a significant win for Indian employers.

At present, the Senior or Specialist Worker category primarily offers advantages in cases where a rapid relocation of an individual is required, and they do not meet the English language requirement for the Skilled Worker category. Should this landscape change, with the Skilled Worker category becoming as efficient as the Senior or Specialist Worker category, Indian businesses could realize savings of £10,000 in annual salary per individual. Should all Senior or Specialist Workers transition to the Skilled Worker category, these savings could extend to £100 million, potentially rendering adjustments to the skills charge unnecessary.

In conclusion, the government’s willingness to enact these changes remains uncertain. While changes to the immigration skills charge are plausible, given the precedent set by the EU, the liberalization of English language requirements may encounter resistance from the Home Office, driven by concerns, whether real or perceived, regarding the potential undercutting of wages for UK workers. Additional perspectives from the Department for Business and Trade, or even the Foreign, Commonwealth, and Development Office, may also influence these deliberations.

Such policy modifications would not solely benefit Indian businesses through cost reduction when sending employees to the UK; they could also expedite the process, making it more efficient than that of competitor countries while significantly reducing costs. Regardless of the outcome, immigration professionals will find themselves navigating a complex landscape when advising their clients on these potential changes.

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