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UK elections: the implications for India

LiveMint logoLiveMint 09-06-2017 Elizabeth Roche

New Delhi: British prime minister Theresa May’s Conservative Party was short of a majority in parliament despite being voted in as the single largest party. With Conservatives winning 316 seats out of the 650, they were still 10 short of the 326-mark the party would need to command a parliamentary majority.

The main opposition Labour Party won 261 seats, while smaller parties like the Scottish National Party won 35 and the Liberal Democrats 12.

The calculation in India is that New Delhi will be dealing with Prime Minister May rather than Jeremy Corbyn of the Labour Party as prime minister.

So what are the implications of the 8 June British elections results for India?

Immigration

For starters, the Conservative Party being the single largest party could well mean that May sticks to her hardline approach on immigration.

Within months of taking office as prime minister in July 2016, May visited India in November with the proclaimed intent of increasing trade ties with Britain’s former colony—now Asia’s third largest economy.

But her visit to India was overshadowed by news reports that Britain had announced changes in immigration rules—including higher salary thresholds—that are expected to affect Indian professionals and IT companies, particularly those using the Intra-Company Transfer (ICT) visa.

Visa fees for Indian tourists, students, business travellers and academicians too were increased—they were higher than for nationals of other countries, including China.

India was hoping to reach an agreement on easier immigration norms during May’s November 2016 visit but a breakthrough proved elusive.

As home secretary in the David Cameron Cabinet, May had been a votary of keeping net immigration below 100,000 per year.

Now, though the election results have not gone in her favour, some in India feel she could stick to her hardline approach on immigration vis-a-vis India, given that it’s a stand she has taken for a while now.

FTA talks with India

May has been seen as keen to build on the “very strong relationship” with India after Britain leaves the European Union (EU).

May’s primary objective during her November 2016 visit was to push for a free trade deal (FTA) that Britain wants to sign as soon as its divorce from the EU comes through. But New Delhi could still think it wiser to go slow on trade talks—preferring to wait for the outcome of negotiations between Britain and the EU before reaching any conclusion on FTA with Britain. India could also seek a quid pro quo vis-a-vis easier immigration norms.

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