Britain’s pledge to sharply reduce immigration will not impede the UK from negotiating a free trade agreement with India, the chancellor has said during a visit to Delhi to promote British business.
Phillip Hammond said on Tuesday that the brunt of the government’s pledge to shrink net migration to the “tens of thousands” would be felt by countries with less-skilled labour, rather than by India, whose citizens currently receive 60% of the work visas granted by the UK government.
“My analysis is that the concern that there has been in the UK over recent years over migration levels is based on a concern about the impact that this is having on the wages of the lower-skilled in the UK,” he said.
Under the post-Brexit immigration scheme Britain would be seeking “skilled people taking well-paid jobs and contributing in a very positive way to the UK economy,” Hammond said. “In that context we can have a very sensible dialogue with our Indian partners.”
He added: “Although we occasionally hear people in India say India doesn’t get a fair crack of the whip, the truth is we issue more visas to Indians than we do to all other nationalities put together.”
With a glut of workers and slow job growth, India is likely to insist that freer movement of labour and students is an essential part of any bilateral free trade agreement between the two countries. Delhi has repeatedly raised concerns that its citizens have been unfairly targeted in crackdowns against fake education institutes and by tightened visa rules for students.
“There is no doubt that there is a perception in India that Indian students are somehow being impeded from going to the UK,” Hammond said. “There is no quota, no limits, no restrictions on Indian students applying to British universities. Ninety percent of Indian students who apply for a student visa get a student visa,” he said.
The crackdown had seen Indian student numbers fall, but they “are now slowly rising again”, he said. “We want to see them rising more quickly, and I can only go on making that statement: we are open to Indians.”
Free trade talks between India and the EU have stalled for more than a decade, but Hammond said future negotiations between Delhi and London were likely be smoother.
“Culturally the UK and India are much better-aligned than India and the rest of the EU,” he said. “There is a genuine desire to do this on the part of both of the Indians … and on the part of the UK.”
He said Britain’s colonial past in India was “increasingly becoming an irrelevance”, but whatever influence it still had was a boon for trade ties between the pair. “We have a legal system and a governance system that is visibly in the same mould, and that does make some things a lot easier,” Hammond said.