Work-visa focus in FTA talks doesn't help India

Instead, the Centre must push for concessions in goods and services trade as well as in investment frameworks

- Sanjeev Sanyal

For decades, India has been obsessively focused on securing commitments for work visas in its trade negotiations, particularly when negotiating Free Trade Agreements (FTAs). This focus on work visas (referred to as Mode 4 in trade discussions) has frequently caused delays and in reaching agreements and forced India to yield substantial concessions in other areas. The current talks between India and the United Kingdom (UK) regarding an FTA are examples of this trend, as discussions surrounding mobility and visa allocations have emerged as major obstacles. However, growing evidence suggests this strategy is outdated and potentially harmful to India's economic interests.

There are several reasons why the whole approach is outdated. First, demographic decline and skill gaps in many developed economies mean that they need to import skilled workers. Indian talent is well recognized across the world as a good source. Yet, India makes substantial concessions in other sectors for access that it would likely receive anyway. This effectively translates to India subsidizing human capital flight at the cost of negotiating leverage in areas that could yield substantially higher economic benefits at home.

Major developed economies already grant significant work visas to Indian professionals without FTA commitments. United States (US) H-1B visa approvals for Indians increased from 46,000 in 2021 to 166,000 in 2022, while German work visas for Indians shot up from 1,000 to 17,000 between 2020 and 2022. This surge occurred despite the absence of trade agreements, driven purely by host-country demand and demographic necessities.