Brexit Britain stands to receive a major trade deal win as India moves to slash tariffs on Scotch whisky and British cars by at least a third.
The move would provide a major boost for Rishi Sunak and Trade Secretary Kemi Badenoch, who arrived in India last week to launch the 13th round of trade talks.
Negotiators have now entered what is being described as the ‘most intense and politically fraught’ stage of the talks, with concessions on services and labour being thrashed out.
The trade deal stands to be India’s first ever comprehensive trade pact with a developed nation, with both PMs – Narendra Modi and Rishi Sunak – hoping to get it over the line before each country’s 2024 General Elections.
Reports this morning suggest India is offering to cut tariffs on whisky, a major British export, from 150 to 100 per cent, or up to 75 per cent for bulk exports.
Britain’s car industry, which currently attracts tariffs as high as 100 per cent, also stands to see major benefits.
In return, Delhi wants movement on lower taxes for companies and workers on short-term visas.
Currently Indians in the UK pay more than £500 million a year in National Insurance, yet don’t receive a British pension and have to pay twice as India makes them continue paying up back home.
India considers this to be a key “sticking point”, with a source telling the Sunday Times Modi’s Government must satisfy India’s business community.
India has already signed agreements with Canada, Australia and France that exempt their workers from making social security contributions in their new country.
The source said: “The social security agreement is a very important thing for us… It creates a lot of ill will if folks have to surrender a significant amount of their savings”.
Delhi also wants legal commitments to protect the length of time Indian graduates can stay in the UK after graduating.
This will be politically contentious, given Home Secretary Suella Braverman recently secured a win with an announcement to clampdown on foreign students in the UK, and a limit on the number of family members they can bring here during their studies.
Any concessions on foreign students will threaten progress on Britain’s record high immigration figures, likely dividing Tory MPs.
In October last year it was reported Ms Braverman almost collapsed UK-Indian trade talks after she criticised proposals to relax movement of people with India in order to secure a deal.
She told The Spectator: “I have concerns about having an open borders migration policy with India.
“Look at migration in this country – the largest group of people who overstay are Indian migrants.”
Her comments sparked ‘shock and disappointment’ among officials in Delhi, who accused her of being “disrespectful”.
