When she finally arrives in India on Sunday for a three-day visit, British Prime Minister Theresa May will have to do a greater balancing act than even trapeze artists. Amid deepening anxieties and increasing uncertainties ushered in by Brexit (the terms of which got even more complicated due to a British court ruling on Thursday), Britain would like nothing more than to be in a position to strike sweet deals with major trade partner India when it eventually leaves the European Union by 2019.
Yet, in order to get access to the fastest growing and one of the largest economies in the world, May must find a solution to the biggest conflict that underlines her tenure as a leader: how to keep the wheels of a sagging economy turning by undertaking free-trade agreements with major economies — a key Brexit promise — while acting against her past instincts as a hard-nosed former home secretary who presided over a hawkish immigration policy and explaining to Brexiteers why achieving the net immigration target of below 1,00,000 per year is a ridiculous, self-defeating policy.
Make no mistake, when Prime Minister Narendra Modi and his key negotiators sit across the table with May and her entourage, liberalisation of UK's regressive visa policy will be one of the key Indian demands. Short of that, there is every chance that trade negotiations won't proceed beyond exchanging of Diwali greetings. Complicating the situation for the British PM are a set of two apparently unrelated events, both of which have a strong bearing on the upcoming trade talks.
The first one took place on Thursday when a British court ruled that Brexit referendum isn't enough to trigger Article 50 of the Lisbon Treaty which formalises exit negotiations and that the government needs parliamentary approval to start the process of leaving the European Union, reports Reuters.
The May government has reacted with dismay, threatening to move the Supreme Court and vowing to stick to the timetable of March 2017 by which she plans to begin divorce negotiations with the EU. But if the Supreme Court upholds the British court verdict then, as Reuters suggests, the British Parliament may have to promulgate a new law to honour the referendum. The ruling has already drawn sharp criticism from 'Leave' leaders who accuse power elites and judiciary of trying to 'subvert the will of the people'.
For India, Indian students and Indian businesses in the UK, the puzzlement over whether the UK will settle for a "soft" or "hard" Brexit just became worse. The court ruling increases the nervousness of Indian investors in UK, who, according to BBC, account for biggest foreign investors in the UK. Data from UK Department of International Trade finds that India invests more in the UK than the rest of the EU combined. Indian businesses are also the third largest job creator in the UK in 2014-15, with about 110,00 people currently employed in Britain by Indian firms.
Any "hard" Brexit or a toughening of the immigration and visa norms will make it infinitely more difficult for Indian businesses to perform in the UK and also go against the interests of Indian students, many of whom are already struggling with the existing norms.
If anything, the scenario became, even more, tougher with the UK on Thursday rolling out a new immigration policy, the terms of which appear specifically tailored to prevent Indian companies in the UK from tapping into India's skilled white-collar workforce and to discourage Indian students from travelling to the UK for studying.
Under the new visa rules announced by the UK Home Office, reports PTI, anyone applying after 24 November under the Tier 2 intra-company transfer (ICT) category must have a higher salary threshold of £30,000 (Rs 25 lakh) from the earlier £20,800 (Rs 17.4 lakh). The ICT route is used largely by Indian IT companies in Britain, and the UK's Migration Advisory Committee (MAC) had found earlier this year that Indian IT workers accounted for nearly 90 percent of visas issued under this route.
Another report in The New Indian Express points out that besides the Tier 2 ICT salary threshold hike, the UK has also increased Tier 2 (general) salary threshold for experienced workers to £25,000, with some exemptions; reducing the Tier 2 (ICT) graduate trainee salary threshold to £23,000 and increasing the number of places to 20 per company per year; and closing the Tier 2 (ICT) skills transfer sub-category.
Not just discouraging Indian companies from hiring skilled Indian workers or putting clamps in place to dissuade the restaurant industry from hire Indian chefs, some of the rules go even to the extent of preventing Indian workers from uniting with their families. Under new rules, as Hindustan Times points out, partners and parents of immigrants applying to extend their stay after 2.5 years in Britain will need to pass a new English language requirement test.
Bear in mind that these rules are in addition to the 2012 ruling (upheld by a UK Appeals Court in 2014) that a worker must have a minimum income threshold above £18,600 a year if he/she wants to bring over his/her partner from abroad, a ruling that many campaigners want to be repealed because it goes against the workers' right to have a family life.
Interestingly, while the number of Indian students in the UK has gone down from 40,000 to about 20,000 in five years (during Theresa May's tenure as longest-serving home secretary), data suggests that the number of Chinese students arriving in Britain has grown exponentially during the same period. The difference in policy towards Indian and Chinese students could be explained by the fact that Indians, due to greater synergy with Britain in terms of language and culture, are more likely to look for a job once the study period is over.
May will have a hard time explaining to Indian negotiators the terms of this new policy even as she seeks to woo Indian investors. India's external affairs spokesperson Vikas Swarup has already indicated that these issues, if not addressed, may impact any bilateral trade deals or negotiations.
Published Date: Nov 06, 2016 10:10 AM | Updated Date: Nov 06, 2016 10:10 AM