Thousands of Indian professionals working in Britain through Indian employers will stop paying dual social security contributions from July 15, with officials estimating that 90-95% of such workers will benefit from the India-UK social security pact coming into force alongside the free trade agreement, according to Business Today.
Key Provisions of the Double Contribution Convention
The Agreement on Social Security, or Double Contribution Convention (DCC), is designed to lower employment costs for Indian companies operating in Britain and strengthen the competitiveness of sectors such as information technology and professional services, the report said.
Under the arrangement, employees temporarily deputed from India to the UK, or vice versa, will be exempt from contributing to the host country's social security system for up to five years, provided they continue contributing in their home country. A certificate of coverage is required to claim the exemption.
"If an employer is contributing in India for the social security of the employee, they do not have to pay in the UK. For that, they have to share a certificate of coverage. From July 15, Indian employers can start enjoying this exemption," an official said, as quoted by PTI.
The exemption is available only to employees of Indian companies on temporary assignments and will not apply to Indians employed directly by foreign companies in the UK.
Beneficiaries and Industry Impact
The benefit was a key demand from India during negotiations and is expected to particularly help major IT companies such as Tata Consultancy Services (TCS) and Infosys, which deploy a large number of professionals to the UK, according to the source.
Currently, around 75,000 Indian professionals work in Britain, while more than 900 Indian companies have operations there. The average annual salary of a professional in the UK is estimated at GBP 40,000–50,000, with about 15% of earnings typically going towards social security contributions.
| Metric | Value |
|---|---|
| Indian professionals in UK | ~75,000 |
| Indian companies in UK | 900+ |
| Average UK salary | GBP 40,000–50,000 |
| Social security contribution share | ~15% |
| IT industry export revenue contribution from UK | ~17% |
| India's services exports to UK (2024) | $21.6 billion |
| India's services imports from UK (2024) | $13.7 billion |
The UK remains the second-largest market for India's $283-billion IT industry and contributes about 17% of the sector's export revenues.
Reciprocal Benefits and Wider Trade Deal
The social security pact will take effect alongside the India-UK Comprehensive Economic and Trade Agreement (CETA), which both countries announced will be operational from July 15, the report stated.
UK Business and Trade Secretary Peter Kyle said the arrangement would benefit professionals from both countries. "We have extended the benefit for UK nationals moving to India to work and continue to build entitlement to a UK State Pension from 36 months to 60 months. They will continue to pay National Insurance Contributions during that period, without also having to pay social security contributions in India," he said.
The provision is reciprocal and applies to highly skilled professionals moving under existing visa routes. The UK already has similar arrangements with countries including Korea, Japan, and Canada.
Kyle said the social security agreement and the FTA would make trade "cheaper, quicker, and easier" for businesses in both countries.
Economic Projections and Sectoral Benefits
Officials also expect the wider trade deal to boost labour-intensive sectors such as textiles and footwear by granting duty-free access to the British market. These sectors currently face import duties of around 8-10% in the UK.
| Sector | Current UK import duty | Under FTA |
|---|---|---|
| Textiles | ~8-10% | Duty-free |
| Footwear | ~8-10% | Duty-free |
The agreement is projected to increase bilateral trade by GBP 25.5 billion annually in the long run, while boosting UK GDP by GBP 4.8 billion and Indian GDP by GBP 5.1 billion.
"This is the most expansive agreement. It is a most aspirational agreement," the official said.
The social security pact, alongside the FTA, is expected to significantly enhance cross-border labour mobility and reduce costs for Indian firms operating in the UK, reinforcing the bilateral trade relationship.
Sources:
