India seeks reciprocity in its trade deals

The Indian government, quite naturally, has stood firm in its resolve not to give in to this pressure, resulting in howls of protests from commentators in the Western media. Further, another magnet for Indian migration, the UK has been pulling up its drawbridge for Indian talent. The country traditionally draws thousands of Indian students who go there for higher and vocational studies and then work there. Revised UK laws have made it practically impossible for Indian students to work in the UK after completing their studies. The government has taken note of all these developments and is engaging with all stakeholders to resolve the issues. Indian commerce minister Nirmala Sitharaman told IGB in an exclusive interview: “Much before Brexit, I'd gone to the UK and met the immigration minister on the high visa charges and other (restrictive) immigration policies. Our High Commissioner to the UK brought up the issue of the UK denying work permits to Indian students who graduate from British universities as was the case earlier. That condition may continue for some time. But now, post-Brexit, we hope our boys and girls will get better access to British universities and better conditions for students following their studies.” India has also taken up the issue of rising protectionism in the US, as well as the new restrictive visa regime, with the appropriate authorities in that country. “We have discussed the visa-related matter with the US Trade Representative and US Commerce Secretary. We have also made it public that we may approach the WTO on increase in visa fees as this could be viewed as a non-tariff barrier. This is against the spirit of free trade practices on the movement of personnel,” Sitharaman said. It is also clear why the West wants greater access to Indian markets. This country is the world's fastest growing economy and its 300 million-strong middle class represents a market that no country in the world can ignore. Since the West is reeling under a sticky slowdown/recession, there is limited domestic demand in those countries. Thus, Western companies need new markets to sell their products in. At the same time, these countries, grappling with heightened levels of unemployment, are restricting the access of Indian companies to protect domestic industry and jobs. The Indian government is, therefore, calibrating the access it provides to foreign companies based on the principle of reciprocity. “India is a large market. We have a large middle class with substantial purchasing power. This makes India a very attractive market for anyone negotiating with us. At the same time, we also have a large number of people who are poor. The government has to keep their interests in mind,” Sitharaman told IGB. “Then, there are sectors such as automobiles, auto components and pharmaceuticals, to name only three, in which India is globally competitive and in which our companies have earned global acclaim. When we negotiate trade deals, we have ensure that our partner country gives us as much access in these and other sectors such as services as we give them. There has to be a spirit of give and take when working out the details and we have to make sure we get a good deal that protects our national interest,” she added.