India has backed down on its demand for more work visas for its professionals in the tech and health sectors in free trade trade negotiations with the United Kingdom.

India will get only 100 extra work visas annually, though it had originally negotiated for a much higher number.

The retreat comes as commerce and industry minister Piyush Goyal, India’s chief trade negotiator, is on a two-day visit to London and is meeting with his UK counterpart, Jonathan Reynolds.

Commerce minister Piyush Goyal meets his British counterpart, Jonathan Reynolds, in London on Sunday. X/@PiyushGoyal

Goyal, who’s on a five-day European swing that will take him to Brussels and Oslo, posted on X after a day of meetings: “In my first engagement, held a productive meeting with the UK Secretary of State for Business and Trade @JReynoldsMP to advance Free Trade Agreement negotiations, reinforcing our commitment to deepening India-UK economic ties.”

News website Politico quoted a British trade official as saying India had been sounding very bullish about the talks. But it is now the British who appear more confident about its position.

“Interestingly, it’s (the UK Department for Business and Trade) rather than the Indian side sounding more positive about the deal being close,” said Politico, quoting a person close to the talks.

The major visa concession is a setback for India, which had initially pressed hard for more access for its skilled workers. Indian negotiators had proposed a significant increase in visas for professionals in IT and healthcare, sectors where India has long seen itself as a global powerhouse.

But faced with mounting British political pressure to limit net migration, Delhi has settled for far less.

As Politico reported, ministers in London warned that only minimal tweaks to the UK's immigration system were possible. British government sources told the publication that Delhi had accepted a cap of no more than 100 new visas annually, and that the mobility chapter of the deal — covering migration issues — was now closed.

Still, India is pressing hard on other fronts. One crucial ask is for the British to accept what’s called the “Double Contribution Convention”. Essentially, this means that temporary workers on short-term assignments – typically less than three years – will get a refund of their monthly payments to the country’s national insurance, which fund British public services like pensions.

Other countries like France have allowed such refunds for almost two decades.

Indian high commissioner in London Vikram Doraiswami said to Times Radio: ““Essentially, what we’re really looking for is something that you have with other countries which allows people who are already paying to their pension pots back home in India to be exempted for the period of their stay here.”

For Indian officials, the issue strikes at a fundamental unfairness: workers who already contribute to pension schemes in India are being double-taxed in the UK – without ever benefiting from British pensions or other entitlements.

The trade talks, now in their twelfth round, have stretched over years and weathered multiple political storms. A deal once seemed within reach under Prime Minister Boris Johnson, but collapsed amid the political chaos that saw Johnson toppled, Liz Truss briefly installed, and Rishi Sunak ultimately take office. Substantive negotiations only resumed after both India and the UK held elections last year.

Goyal is accompanied by a business delegation from India and is expected to hold a series of meetings with British ministers during his time in London. Finance minister Nirmala Sitharaman was also in London earlier this month.

The visits in quick succession by the two Indian ministers are seen as a sign that Delhi wants to push the talks over the finish line soon.

The proposed FTA aims to significantly boost bilateral trade.

Yet big hurdles remain. Not the least is Britain’s proposed carbon border adjustment mechanism. The new environmental tax would impose duties on imports, including Indian steel, aluminium, and cement, from countries with looser carbon emissions standards.

Britain hopes to align its regime with a similar EU system coming into force in 2027.

For India, the carbon tax is a red line. Goyal has sharply criticised the measure, warning it threatens to sound “the death knell of manufacturing in Europe.” He is expected to raise the issue not just in London but also when he heads to Brussels later this week to pursue separate trade talks with the European Union.

In a statement, Britain’s department for business and trade said: “This government is committed to doing the right deal with India which will improve access for UK businesses, cut tariffs, and make trade cheaper and easier. Talks have been ongoing since they were re-launched in February, and we will only sign a deal that is in the best interests of the British people and drives growth across the UK.”

For now, India appears to be playing the longer game in its backing down on visas in the hope of securing bigger wins on market access and the removal of punitive carbon taxes that could choke its exports.

Another main issue still in the way of a deal is India's punishing 150 per cent tariff on Scotch whisky. India is the UK's biggest Scotch whisky export market by volume. A compromise looks to be in the offing with observers expecting Delhi to cut the whisky duty to 50 per cent.

"The whisky and the National Insurance are a couple of the matters still to be resolved as well as duties on automobiles but it seems we're nearly there on agreement,” says an official who is close to the talks.