Suella Braverman, India’s home secretary, made remarks about “visa overstayers” that angered Indian officials and those in her own administration, putting the accord, which is India’s largest and most ambitious free trade agreement, in jeopardy.
The much-awaited trade agreement between India and the UK appears to be in danger of failing.
After her predecessor, Boris Johnson, set the time frame of ideally by Diwali but “definitely by the end of the year,” UK Prime Minister Liz Truss promised to complete the deal.
The trade deal and its significance
The negotiations for the agreement started in January 2022, with Truss, then the international trade secretary for the then-Boris Johnson-led government, laying the framework by approving the India-UK Enhanced Trade Partnership (ETP) in May. The agreement would be India’s largest and most comprehensive free trade agreement, according to Bloomberg.
An agreement to lower or eliminate import-export tariffs between two or more countries is known as a Free Trade Agreement(FTA). FTA allows for minimal to no tariff barriers in the trade of goods and services between the parties. In essence, it liberalizes trade and takes down safeguards for manufacturing and industry.
In such agreements, two nations also loosen rules for boosting investments and trade in services while also eliminating or drastically reducing customs charges on the majority of products exchanged between them. According to people acquainted with the situation, who spoke to the outlet, New Delhi is also attempting to recoup half a billion pounds in contributions made by Indian workers to Britain’s social security system as part of the pact.
From $13.2 billion in 2020–21 to $17.5 billion in 2021–22, there was an increase in bilateral trade. In 2021–22, India’s exports were $10.5 billion while its imports were $7 billion.
Why is the deal having issues?
The agreement is in jeopardy as a consequence of comments made by India’s home secretary Suella Braverman regarding ”visa overstayers”.
When questioned about the possibility of student and business visa flexibility under an India-UK free trade agreement, she admitted that she was hesitant. Further, she also added that the majority of immigrants who overstay their visas in this country are Indians, according to data on migration.
UK media reported that the ‘disrespectful’ remarks by Braverman left ministers in New Delhi ‘shocked and unhappy.’
The primary task in India has been mobility, and everything else — financial services, banking, education, whisky origin rules, etc. – depends on it. The Indian High Commission said, “comments on these matters may not be appropriate given that the negotiations are underway, and that any arrangement will include issues of interest to both sides”.
The Indian government is committed to working with the British government. It is to make it easier for Indian nationals, who have overstayed their visas, to return home as a part of our larger conversations under the heading of migration and mobility. According to information provided by the Home Office, as of this writing, action has been taken in every case presented to the High Commission. Additionally, the UK has committed to upholding a number of obligations under the Migration and Mobility Protocol.
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The looming Diwali deadline makes Modi’s trip unlikely to happen.
It is now thought that there are fewer chances of achieving the pact’s Diwali deadline set by former prime minister Boris Johnson.
The FTA would be significantly less extensive than anticipated if the Diwali deadline is still fulfilled, according to strategic analysts on both sides, leaving important sectors open for future negotiations. Kemi Badenoch, the trade secretary, appeared to lay the foundation for this last week when she remarked that an FTA with India really wouldn’t mean “ we can’t do even more later. ” According to a Politico article, Prime Minister Narendra Modi’s plans to travel to the UK for Diwali to ratify an FTA are now unlikely to go ahead.
Braverman “ damaged the political atmospherics ” of the agreement and the public’s opinion of the UK in India, a business insider told the site, adding that the home secretary’s remarks “ didn’t go down well at all in India. ” The businessperson continued, “ [In the deal] there are still several critical chapters to conclude, which haven’t advanced significantly in the recent month. ”
More than concerns over migration, the individual continued, doubts about the accord “ are broader. ”
Trouble for Truss?
This might cause Truss a tonne of headaches. The truss may be compelled to give India concessions because she is already under pressure to sign trade agreements, according to Bloomberg. Politico said that the trade department and 10 Downing Street were “ frustrated ” by Braverman’s remarks.
An official from the commerce department told Politico that “the Indians are famed negotiators and inherently protectionist.” According to Mint, the prime minister wants to complete this trade agreement as soon as possible, ideally by Diwali, but at the very least by the end of the year. He also wants to ensure that the agreement is as comprehensive as possible, covering everything from life sciences to technology to agriculture.
Her post-Brexit vision that the UK can complete new deals in markets that were previously closed off owing to its membership in the European Union will take another hit if she fails, the article stated. However, despite the idea that Braverman and Truss are at odds about securing the FTA by the Diwali deadline, a media story suggests that they are on the same page over migration.
To build the very special India-UK partnership in trade, investment, defense, and through the #LivingBridge, the Indian High Commissioner to the UK, Vikram Doraiswami, met Truss at an event in London on Tuesday night. He then tweeted: “Delighted and honored to greet HE PM Liz Truss @10DowningStreet this evening.”
In 2021, we will have booming commercial cooperation worth £24 billion with India, according to the statement. “We remain clear that we won’t sacrifice quality for speed, and will only sign when we have a deal that meets both countries’ interests,” it continued.
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