It should have been a triumph. We might not have managed to get a trade with the United States over the line, and we are still waiting for the long-promised ‘reset’ with the European Union. But the Labour government has managed to complete a major trade deal with India, and that should prove a significant boost for the British economy. There is just one catch. By clumsily exempting temporary Indian workers from National Insurance contributions Sir Keir Starmer has blown it – and the deal will be permanently tarnished.

By clumsily exempting temporary Indian workers from National Insurance contributions Sir Keir Starmer has blown it

The US may remain the biggest prize, but India is not far behind. It is already set to be the fourth largest economy in the world this year, and given both its favourable demographics and growth rates may one day overtake both America and China as the largest. There are long standing historical and cultural ties between the UK and India, and it is already our 11th largest trade partner. Taking down tariffs and other barriers in trade between the two nations should help both exports and investment. There is nothing not to like about that. It is win-win on both sides, and especially for Brexiteers who will argue that it will now make it impossible for the UK to ever rejoin either the EU or the Customs Union.

Here’s the catch, however. The UK has agreed to exempt Indian workers in the UK for less than three years from paying NI contributions. As it happens, you can have a legitimate debate about whether that is the right or wrong decision. After all, anyone who works in the UK for less than three years won’t be receiving any of the benefits that NI supposedly pays for (even if in reality it is just a general tax). And it may well be justifiable to exempt temporary workers from a poorer country from the full burden of British taxation.

The trouble is, it looks terrible. This government has already increased the NI that has to be paid by anyone employing a British worker, and looks set to raise taxes significantly across the board very soon. It has ended the non-dom status that applies to wealthy foreigners. And yet at the same time, it has offered an exemption to a potentially very large group of foreign workers. It is very hard to justify that. The charge of ‘two-tier taxes’ will stick. Instead of a triumph, the trade deal will be a disaster. And the PM has only himself to blame for that.