Concessions on Indian student immigration could give UK a post-Brexit boost

When I arrived from India as a 19-year-old student in the early 1980s, the UK was a very different country. In many ways, it was less open than now, but several institutions in London – such as the Indian YMCA, founded in 1920, and the India Club, which has stood on the Strand since the 1940s – testified to the welcome that Indian students had received going back a century.

But those hoping to take the same path as I did have faced more barriers in recent years, and the number of Indian students in the UK accordingly remains 50 per cent below its peak in 2010, despite a slight recovery since 2015, standing at barely 15,000. Meanwhile, during a trip to India last month, the Canadian high commissioner proudly informed me that there are now 100,000 Indian students in Canada – more than six times the UK figure.

The reason for the UK’s decline as a destination for Indian students is the rigid stance on immigration adopted by the prime minister (and former home secretary), Theresa May. With her target to reduce net migration to the tens of thousands, the treating of students as immigrants leads to negative perceptions in India of the UK’s restrictive visa regime: perceptions that discourage Indian entrepreneurs, highly skilled workers and talented students from even looking to get started in the UK. During my trip to India, I saw newspaper adverts from companies promoting international study in Canada, the US and Australia, but there was no mention of the UK.

There is no justification for seeking to reduce numbers of international students. Universities UK released figures last year suggesting that they contribute £25 billion a year to the UK economy. Just last month, another study by the Higher Education Policy Institute and Kaplan International Pathways put their net contribution (accounting for things such as their cost to public services) at £20 billion.

Moreover, we now know that the number of international students overstaying their UK visas has been hugely overstated, based on flawed International Passenger Survey statistics that were last year downgraded to “experimental”. The actual number of overstayers has been declared by the UK government to be 4,500 a year: not the 100,000 scaremongering figure that was constantly being alluded to by ministers.

The prime minister missed an opportunity last month to show that the government had learned a lesson from this. Instead of bowing to reported pressure from leading Cabinet ministers for students to be removed from net migration figures, she chose to dig her heels in once more.

Closing the automatic two-year post-study work visa route has also had a negative impact on recruitment of Indian students. On a purchasing-power parity basis, living and studying in the UK is expensive: the introduction of the work visa in 2008 made a significant difference by enabling international students to work to help pay for their studies, gain valuable work experience and contribute to the economy – not to mention build generation-long relationships with the UK.

The prime minister’s intransigence comes at a time when the UK faces a future outside the European Union. Its need for strong trading partners has never been so great, and engagement with India, one of the world’s most populous and powerful countries, must be a first priority. After all, more than 700 Indian-owned businesses are already thriving in the UK, employing more than 100,000 people, according to Grant Thornton. And India invests more in the UK than it does in all other EU countries put together.

Liam Fox, the international trade secretary, boasts about achieving a trade deal with India post-Brexit. But such deals are notoriously difficult to negotiate. India has only nine – and not one is with a Western country. That said, the desire for an enhanced UK-India relationship is two-way. India’s prime minister Narendra Modi, the Confederation of Indian Industries and the Federation of Indian Chambers of Commerce and Industry are all looking to build ties, too. But Modi has said unequivocally that the international movement of people, especially with regard to education, is critical to the success of any future partnership.

More than half the Indian population is under the age of 25. There is a huge demand for digital and technical skills, as well as for science and engineering qualifications, and the number of students looking to study abroad is increasing by about 8 per cent a year. Part of the solution is for the Indian government to allow foreign universities to open branch campuses on the subcontinent; many British universities would like to do this, and May should press for it. But she must also respond with considerable concessions on immigration policy.

These do not relate only to students. The UK government should also reduce the onerous visa charges imposed on Indian business and tourist visitors, which are far in excess of those levied on Chinese visitors. But permitting more international students is the key. And rather than promoting stronger post-Brexit links with India, continuing to take the wrong approach here will only drive the two nations further apart.

Lord Bilimoria is a British-Indian entrepreneur and life peer.