 "Theresa May and Narendra Modi")
Bilateral meetings on Monday saw the British government asking for arbitration on the Vodafone and Cairn tax disputes to be expedited and India putting pressure on Britain’s visa restrictions.
As part of the 11th India-UK Joint Economic and Trade Committee annual meeting, between Britain's minister for international trade Liam Fox and commerce and industry minister Nirmala Sitharaman, the multi-billion dollar legal disputes were flagged.
Cairn Energy and Vodafone have invoked the Bilateral Investment Treaty and served arbitration notices over tax disputes. While the tax demand on Cairn Energy is Rs 10,247 crore, that on Vodafone is Rs 14,200 crore.
"I reaffirmed this government's commitment that we shall not take the retrospective taxation route and that we believe in a simplified taxation structure framework," said Sitharaman.
Saying that both matters were already in court or under arbitration when the present government came to power in 2014, she added, “Anything which was leading towards it or around it, we tried removing it and cleansing it and making it simpler."
On immigration, they exchanged considerable differences of opinion. London says it needs to crack down on individuals who overstay on their visa. Delhi says this affects Indian students who want to work after studies in Britain. Sitharaman said the number of Indian students bound for Britain had dropped in recent years due to the cumbersome process for obtaining visas and the high fees.
Current figures suggest about 10,000 Indian students, a drop of almost 50 per cent from earlier. However, Fox said the numbers showed a drop due to Britain's closing of bogus universities where some students had been enrolled.
Last week, new and tighter visa rules announced by the UK will curtail the number of eligible Indians, with the base salary for those allowed to work in Britain being raised substantially. Under the new rules, anyone applying after November 24 under the Tier-2 intra-company transfer (ICT) category would be required to meet a higher annual salary requirement of £30,000 (Rs 25 lakh) from the earlier £20,800 (Rs 17.4 lakh).
“The UK should not give the impression that it is interested in India’s market and not our talent,” Sitharaman said, reiterating a comment on her social media page.
Anger at levels of immigration from both inside and outside Europe were seen as a key factor in the outcome of the June referendum when British voters opted to pull out of the European Union.
India has also raised the issue of a 'totalisation' agreement --Indian professionals who work in Britain pay social services premium but return without any benefits derived out of it, with the amount getting locked. The minister said the raising of charges from Indian professionals who go to the UK only to fund their own skill development "was somewhat like a non-tariff barrier" and discouraging competitiveness in the services sector.
Sitharaman added talks on a free trade agreement would take place after Britain exited the EU.
