 "Big Ben and Houses of Parliament, London, UK")
Planning to travel to the UK for a long winter? Your costs have just shot up significantly. Sample this: On an average, a week-long trip to the UK costs Rs 2 lakh a person, inclusive of airfares, visa cost, accommodation and food.
From November, the UK wants to impose a new refundable deposit of £3,000 (Rs 2.76 lakh, at Rs 92 a pound) for a six-month visit from India and five other high-risk nations in Africa and South Asia. As per industry figures, close to 300,000 Indians traveled to the UK last year. Given that the imposition is for longer-term travel, this deposit will especially hit visits from parents or senior citizens or contractual workers.
Since April, visa costs have been raised to Rs 6,000 (from Rs 4,200), a same-day visa costs Rs 50,000. What would hurt spenders more is the rupee has dipped 10.5 per cent against the pound in the past three months.
While one doesn’t know the timeline for the refund, industry players say it could take up to a month. In other words, the money could be locked from the time of securing the visa to a month after the trip which could be six-nine months, depending on when you applied for the visa. So, you stand to lose a decent sum in interest income by locking in these funds for six-nine months. For example, if you put this amount in a fixed deposit for six months with the State Bank of India, it would have paid 6.5 per cent annually (SBI’s rate for 181-day deposits) or in a bank account (at least four per cent annual deposit rate).
For students, the concerns are greater. However, it is not clear whether students would have to pay this deposit. “In all likelihood, this (refundable bond on visas) may not apply to students because a student visa is much more scrutinised than a business visa. However, we are awaiting clarity on this,” says Naveen Chopra, chairman of The Chopras, an education consultancy firm.
The higher cost of education due to a rise in fees and the rupee’s depreciation has already increased the outgo for students. For instance, a one-year master’s course in business management at Oxford University, including tuition fee and accommodation, costs up to Rs 31 lakh, a rise of 15 per cent compared with about Rs 27 lakh a year ago, say experts. Since students usually depend on education loans, any additional amount implies more collateral. It is, therefore, hardly surprising that the number of Indian applicants has fallen quite sharply in the past year.
According to the Higher Education Statistics Agency of the UK government, published in January 2013, MBA applications to B-schools in the UK have dropped by more than 10 per cent. The number of Indian applicants has seen the steepest fall of almost 25 per cent between 2011 and 2012. Travels to UK could suffer a similar fate.
Visits from parents or senior citizens or contractual workers will be impacted the most. Rajesh Rateria of Cirrus Travels, a Mumbai-based travel agency, feels this will lead to 25 to 30% drop in leisure trips to the UK. “Such norms increase accounting hassles. And even for a break journey one will need to pay this extra price. One needs a UK visa when traveling on British Airways or to the Europe. This may lead to leisure travellers dropping UK from their list as they travel on a tight budget,” he says.
