India’s trade, talent pipeline under threat from Europe’s right-wing, populist surge

The rise of far-right nationalism in Britain and France – where populist, anti-immigrant electoral forces are resurgent – is casting an ominous shadow over the services sector, a vital artery of the global economy.

Jingoistic reactionary agendas have been gaining ground across Europe, endangering the cross-border movement of skilled professionals that these industries depend on.

Visa access for short-term professional work is fundamentally different from permanent immigration, said TS Vishwanath, a principal adviser at international trade consultancy ASL-Legal in New Delhi. “But many governments feel they are similar”.

The numbers tell a stark story. Over the past two decades, the share of foreign-born workers in the UK workforce has more than doubled, from 9 per cent in 2004 to 19 per cent – around 6.2 million people – by the end of 2022, an Oxford University paper published early this year showed.

This influx has brought skilled talent from across the globe, including 250,000 Indians who arrived last year alone – around 127,000 for work and 115,000 for study.

Chinese and Pakistani workers have also flocked to Britain in recent years, to the tune of 90,000 and 83,000, respectively, according to a May report in The Economic Times, citing 2023 data from the UK’s Office of National Statistics.

For India, the seamless movement of skilled professionals is a make-or-break issue as it negotiates new free-trade pacts. As a global services powerhouse, particularly in sectors like information technology, the South Asian nation’s ability to deploy its talented workforce around the world is crucial.

Free movement has been a key sticking point in India’s free-trade pact negotiations both with the UK and the European Union, according to Vishwanath, who said both are seeking broadly similar agreements.

Yet the rise of anti-immigration populists casts a pall of uncertainty over this professional pipeline.

The stakes could not be higher. India’s services exports – a US$323 billion juggernaut as of last year – have been the backbone of its economic growth for decades. Any disruption to the cross-border movement of talent that fuels this engine could have devastating ripple effects, both for India and the global economy at large.

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Nigel Farage’s campaign, which focused on illegal migration, resonated with millions of UK voters. Photo: EPA-EFE

In Britain, the rise of right-wing populism has taken a dramatic turn, with Nigel Farage’s Reform UK Party making major electoral inroads. After failing in seven previous bids, Farage has finally secured a seat in parliament, as his party chalked up four other victories and garnered more than 4 million votes nationwide.

Reform UK’s laser focus on hardline anti-immigration policies, particularly targeting illegal migrant arrivals by boat, has clearly struck a chord with British voters disillusioned by the status quo. This drew votes away from Rishi Sunak’s ruling Conservative Party, which suffered its worst-ever electoral defeat on July 4.

While the newly-elected Labour government under Keir Starmer is generally seen as more open to the movement of skilled professionals, the rise of right-wing nationalism poses a formidable challenge.

“The Reform UK Party has come up as a source of worry,” said Biswajit Dhar, a professor at the Council for Social Development in New Delhi. “They will keep nudging the government towards a more hawkish stance on immigration.”

Indeed, with the spectre of anti-immigrant sentiment looming large, analysts agree that immigration policy is poised to be a dominant force on the British political agenda in the months ahead.

“Gangs are using small boats from Europe to cross to the UK. It’s a toxic issue in British politics. It is a national security threat that terrifies the public more than the nuclear spectre from the Ukraine-Russia war,” said Christopher Blackburn, a British political and security analyst.

“But for those abroad who want to help boost trade and cultural ties, they will be fine,” he said. “Cutting off foreign talent who want to contribute to the commonwealth of Britain isn’t on the cards.”

Experts warn that any crackdown on the cross-border movement of professionals could severely constrain economic growth, especially as Europe’s ageing populations exacerbate labour shortages and drive up wage inflation.

These dynamics are not unique to the UK – France and other parts of Europe are grappling with parallel challenges as the rise of right-wing populism upends the status quo.

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04:47

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In France’s recent election, far-right leader Marine Le Pen came closer than ever to securing power, her National Rally Party bolstered by a coalition of new allies.

Right-wing parties appear to be gaining in prominence, with immigration-related issues at the forefront, according to Cedomir Nestrovic, a geopolitics professor at ESSEC Business School Asia-Pacific in Singapore.

The concerns surrounding immigration have only intensified, as smuggling networks have proven to be remarkably flexible and resilient.

People smugglers have been “adapting to law enforcement actions by quickly changing the routes they use,” said Priyajit Debsarkar, a London-based British-Indian author. “The routes are continually diversifying and changing.”

To combat this, he said law enforcement authorities must rely on real-time situational awareness and intelligence-sharing, a daunting task in the face of nimble and elusive criminal operations.

Yet, as nationalist fervour rises, the lines between foreign talent and illegal immigration have become dangerously blurred.

Political parties in France and the UK have been quick to scapegoat migrants for a host of societal ills, a dynamic that could have dire consequences for the free movement of professionals and tourists – the lifeblood of a thriving economy.

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