India-UK FTA: The Labour Administration May Take a More Aggressive Approach to Immigration and Climate Change
According to insiders, the UK may take a more aggressive approach on issues including immigration, labour, the environment, and climate when the incoming Labour-led government in the UK plans to…
According to insiders, the UK may take a more aggressive approach on issues including immigration, labour, the environment, and climate when the incoming Labour-led government in the UK plans to resume negotiations on the UK-India Free Trade Agreement early next year. According to a source close to the situation, the negotiations are expected to resume in January 2025 or shortly thereafter and may be extended since UK Prime Minister Keir Starmer's administration might not adhere to all of the agreements made by the previous Conservative government. Even in places that are thought to be settled, further interactions could be required.
Negotiation Terms
"The terms of negotiations may differ from the previous terms, particularly in specific areas, and it is likely to affect the negotiating positions of both sides on important issues such as work visas and the proposed Carbon Border Adjustment Mechanism (CBAM)," the source stated. "There is no doubt that the Starmer government wants an FTA with India."The UK may now be more resistant to India's desire for simpler work permits for its experts given the Labour government's harsh attitude on immigration. "The Labour administration is likely to be considerably harsher on work visa issues than the Conservative government was while it was negotiating the free trade agreement with India. As the insider noted, "Starmer would not want to be seen as giving away job opportunities. Checking immigration and ensuring jobs for the UK people are top priorities."Although it could be simpler to facilitate work visas for highly skilled occupations than for low-skilled ones, firms may still have to prove that they are doing enough to train locals so that they can also be eligible for these jobs. Following bilateral discussions with Modi at the last G20 meeting, Starmer released a statement saying, "A new trade deal with India will support jobs and prosperity in the UK — and represent a step forward in our mission to deliver growth and opportunity across our country."The two parties had aimed to boost bilateral commerce in products and services to an estimated $100 billion by 2030 through the effective implementation of the free trade agreement, which will encompass both commodities and services. India's imports and exports to the UK totalled $8.41 billion and $12.9 billion, respectively, in 2022–2023. The Labour administration would also prioritize environmental and climate-related issues, which might be a blow to India's aspirations of opposing the planned CBAM. As part of the FTA talks, India hoped to persuade the UK government to grant it flexibility on CBAM. The claim was that the tariff reductions made possible by the trade agreement might be offset by carbon fees . The source stated that stronger measures are anticipated from the Labour government.Early in 2022, the Conservative administration, led by Prime Ministers Boris Johnson and Narendra Modi, began the UK-India Free Trade Agreement discussions. The first target for concluding the talks was Diwali in 2022.
