Ahead of the G20 summit in Delhi, what are the prospects for a free trade deal with India?

Rishi Sunak’s warm relationship with India should stand him in strong stead in the forthcoming negotiations. But there are some obstacles to overcome, writes Sean O’Grady, not least that he needs such a deal for political purposes

Negotiations between the two prime ministers are likely to be tough (PA Archive)

The prime minister, proud of his Indian heritage, is right to feel some special emotion as he and his wife Akshata Murty, an Indian citizen, travel to New Delhi for the G20 summit. He is a son of Southampton, and a Saints fan – but he’s also been granted the affectionate accolade of “son-in-law of India”.

Given the historical, industrial, cultural, sporting and family links between India and Britain, it is fitting, and useful, that his dealings with Indian prime minister Narendra Modi will take place in a warm atmosphere – but their negotiations, especially on the much-vaunted India-UK free trade deal, will be tough.

What does this G20 summit mean to India?

The G20 summit helps to cement India’s status on the international stage, but also highlights how dangerous, both for India and for the West, is the country’s pivot towards the emerging so-called Brics (Brazil, Russia, India, China, South Africa) bloc in some kind of illusory and misguided attempt to reinvent the old non-aligned movement.

Modi should understand that India is a natural geopolitical rival of both China and Russia. In particular, it is not in Indian interests to indulge, let alone support, the world’s current pre-eminent war criminal, Vladimir Putin.

In any case, and despite some embarrassing environmental and human rights matters that Rishi Sunak – and other leaders, such as Joe Biden – will need to press in discussions with Modi, the summit does remind us that India is cautiously engaging with the rest of the world, both economically and politically, and aspires to a leadership role.

What does it mean to Sunak?

Aside from some emotion, Sunak desperately needs a substantial free trade deal in order to demonstrate that Brexit is “working” and that all the rhetoric about “Global Britain” can be made into some kind of reality.

The trade agreements the UK has secured thus far – with, for example, India, the Trans-Pacific Partnership and Japan – are either small in their impact or largely carried over from old EU treaties, if not both. Trade deals with the two biggest economies in the world, America and China, aren’t going to be struck in the near future, so the next best bet is India, whose economy is the fifth largest in the world and now bigger than that of the UK (and with better growth prospects).

Sunak’s negotiating weakness (as with other post-Brexit deals) is that the Indians know that the British government really needs it to succeed for political purposes, as well as to boost the economy, and in time for the general election. It will be quite difficult for Sunak to walk away from whatever deal should emerge, even if it’s flawed.

What are the chances of Sunak bringing a free trade deal home this weekend?

Nil. Progress is being made, according to Kemi Badenoch, the business and trade secretary, but these are the hard, politically sensitive yards. In return for the UK gaining better access to the Indian market for cars, Scotch and financial services, Delhi has made no secret of the fact that it wants the UK to grant more study and work visas to enable its talented young people to come and study in UK universities.

Why can’t we give more visas to Indian students and workers?

No reason, except that immigration is such a difficult issue in British domestic politics, and especially among sections of the Conservative Party. It is a long-standing problem. Even pre-Brexit, during the Cameron administration, the Home Office, in the indefatigable shape of Theresa May, opposed boosting the UK’s higher education sector by granting more access to citizens of India.

Now the leader of the internal resistance is her successor, Suella Braverman. Braverman’s allies have briefed the media that she openly challenged the prime minister on the issue during a recent cabinet meeting. There is quite a large body of opinion in Conservative circles that trade deals should have nothing to do with migration, and that it would be better to abandon the deal than to face the backlash – both from within the party and possibly from the country more widely.

Sunak’s team stresses that there will be no change in UK immigration policy – ie the points-based system. However, the prime minister has certainly not ruled out an upwards adjustment in migration of one sort or another from India. His spokesperson puts it in nuanced terms: “There are no plans to change our immigration policy to achieve an FTA, or this FTA. The only aspect of the movement of people covered by a [free trade agreement] is business mobility – that’s the temporary movement of business people for specific purposes.”

Can Braverman’s opposition be overcome?

In the end, yes – and despite some irreconcilable rebels on his own side, Sunak could probably get the trade deal through the Commons. However – purely speculatively – there’s some chance that Braverman would continue to brief against cabinet policy, or even resign over the issue of Indian visas and/or the question of renouncing the European Convention on Human Rights.

Leaving aside matters of policy and principle, Braverman would need to calculate whether such a move would do her more harm than good when the time comes for the next party leader and (likely) leader of the opposition to be elected by MPs and the membership. Fronting up policies she doesn’t believe in doesn’t seem to be doing the home secretary much good at the moment. She also knows that Sunak would probably prefer to reshuffle her into another job or out of his government altogether.

So the trade deal will happen?

Yes, and it will stand as one of Sunak’s more abiding achievements. It will probably be good for the UK economy. But the visa/migration aspects of the deal will also consume some more of what political capital he has left.