NEW DELHI: Around 75,000 Indian workers on short-term visa in the United Kingdom (UK) and 900 employers there are expected to benefit from the Double Contribution Convention (DCC), which came into force, along with the signing of UK-India Comprehensive and Economic Trade Agreement (CETA) between the two countries on Thursday.
Indian workers temporarily employed in the UK and companies that hire them will be exempted from contributing to Britain’s National Insurance Contribution (NIC) for three years. The same principle of the social security agreement will be applicable for British citizens and companies situated in India.
This agreement is meant to prevent double social security contributions for workers temporarily in both the countries, and in the process, support the formalisation of workers and ensuring employer compliance with social security contributions.
After the CETA was signed between Prime Minister Narendra Modi and his British counterpart Keir Starmer in London on Thursday, the NDA government described it as a “major breakthrough”, significantly improving take-home pay and reducing costs for Indian companies.
“This will exempt Indian professionals and their employers from social security payments in the UK for up to three years, improving the cost competitiveness of Indian talent,” the government statement read.
“This has been a long-standing demand of Indian industries. Around 75,000 Indian detached workers to the UK and 900 employers are expected to benefit once the DCC comes into force,” the British High Commission said in the handout to media.
While working in the UK, the amount of contributions paid by Indian detached workers back into the India Employees’ Provident Funds Scheme will be similar to the amount they would have paid to the UK NICs, the Starmer government explained.
Owing to this agreement, Indian detached workers will not be entitled to the UK State Pension or other contributory benefits, the UK government stated. But the Indian expat’s family member will have to pay UK NICs on taking up a job there.
The UK allayed possible fears as it clarified that the DCC will not make it cheaper to hire Indian workers over British workers, and nothing in the agreement will change the immigration regime or affect the UK’s right or ability to control our borders.
Indian-owned companies operating in the UK have gone up to 1,197, a 23 per cent increase, compared to the 971 companies in 2024, a 2023 report from Grant Thornton UK stated. They have 126,720 employees across the UK, and the combined revenue of these companies went up to £72.14 billion, the report added.
India already has reciprocal social security agreements (SSAs) with 22 countries. The Ministry of Labour and Employment has been urging the Commerce Ministry to prioritise social security schemes (SSS) in ongoing trade negotiations in future free trade agreements with other countries where expat population is high, including the US.
Source: The Hindu Business Line
