Mukesh Kacker
The ongoing negotiations between India and the UK on a free trade agreement (FTA) have brought different perspectives into sharp focus on the subject of visa for skilled workers from India. An FTA decides the extent of access either country gains into the domestic market of the other in broadly three areas – goods, services and ‘mobility’ or movement of individuals for leisure, study and work.
Visas for work are of many types and the specific category known as ‘worker visa’ refers to sponsored visas for three sub-categories – skilled workers, skilled workers in healthcare and intra-company transfers.
This visa allows a skilled worker to come and stay in the UK for a period of up to five years, making the person eligible for a job with an approved employer on being sponsored. This type of visa is important because it typically leads to settlement in the UK.
Numbers on the rise
The number of skilled Indian workers in the UK has been increasing steadily over the years and they continue to be the top nationality to be granted worker visas. In the immigration statistics published on 25 August 2022, the UK Home Office announced that Indian nationals accounted for 46 per cent of all skilled worker visas granted between July 2021 and June 2022. During this period, Indian nationals received 103,000 worker visas, a whopping 148 per cent increase over the previous year.
In the FTA negotiations, New Delhi is believed to be demanding a higher number of worker visas as well as other types of work visas. India also wants the UK-India FTA to emulate the India-Australia FTA, recently approved by the Australian Parliament, under which former students can live, study and work in Australia for up to four years.
The reason ‘mobility’ is the key Indian ask and everything else – goods and services – hinges on it is not difficult to grasp. While the UK is in recession, India is the fastest growing economy in the world. As far as trade in goods and services is concerned, India does not gain from the FTA as much as the UK does. India has surplus labour, particularly skilled labour and, expectedly, it wants to balance the gains made by the UK in goods and services with getting a larger slice out of the UK employment market.
If economic logic alone was the deciding factor, then the UK would have readily agreed to Indian demand. The labour force in the UK has shrunk with 1.2 million vacancies across the labour market.
Crippling shortages
British businesses are wrestling with this crippling shortage and begging the Government to loosen restrictions on immigration rules to allow more workers to come in. Tony Danker, Director-General of the Confederation of British Industry (CBI), has been vocal in demanding that more foreign workers should be brought in to ‘plug the gaps’ in the labour market. Lord Wolfson, CEO of clothing retailer Next, put the crisis in perspective when he recently admitted that in spite of having voted for Brexit, he now realises that the UK needs immigration of skilled workers.
But politically, this is not something that UK can afford to do at the moment. The very idea of Brexit was predicated on establishing an economic and political identity independent of the EU and of the many positives of Brexit proclaimed at that time was the assertion that an economically independent UK will be able to take advantage of many bilateral FTAs.
UK must deliver
So, if the logic of Brexit is to be reasserted then the UK Government must deliver an FTA with a major economy pretty quickly. With an FTA with the US a non-starter and one with China or Russia a mere fiction, India remains the UK’s best bet. The FTA is therefore more needed by the UK than by India and the UK government recognizes this reality only too well but is constrained by domestic political factors to admit it openly.
Prime Minister Rishi Sunak has survived his first test by issuing a credible budget statement. He also needs to survive politically and that depends on keeping the right winger Conservatives, with their avowed opposition to increasing immigration, on his side. The UK’s response to the Indian demand for an increase in the skilled worker visa and other work visa numbers will depend on Sunak’s ability to convince the right wingersto accept not only the economic logic of delivering growth by increasing skilled immigration but also the realpolitik logic of delivering an FTA with a major economy sooner than later.
ABOUT THE AUTHOR
Former Indian Administrative Service officer Mukesh Kacker writes for various publications in India on economy and business. With three decades of experience in the Government, Kacker works as an independent advisor to companies, helping them strategise their activities besides holding Board level positions. He is an Independent Director on the Board of Capri Global Capital Ltd. Kacker has done Masters in Public Administration from John F Kennedy School of Government, Harvard University. Living in London and pursuing the Financial Times Post Graduate Diploma for Non-Executive Directors, Kacker remains a keen observer of the British parliamentary democracy. He is deeply interested in the changing dynamics of the UK – India relations with specific focus on the ongoing negotiations for a free trade agreement (FTA). Email: kacker57@gmail.com
