- The UK-India CETA signed on 24 July 2025 includes a Double Contributions Convention exempting detached workers from host-country National Insurance/social security for up to 36 months if they stay on their home employer’s payroll.
- The measure is aimed mainly at lowering costs and boosting mobility in services (especially IT), with tens of thousands of Indian assignees expected to benefit and the UK government forecasting about £100 million a year in foregone NIC.
- While exempt, workers do not build UK contributory entitlements (such as State Pension credits), and the arrangement does not change UK visa or immigration rules.
- Supporters frame it as a competitiveness tool within the wider trade deal, while critics argue it creates unfair advantage and raises implementation and enforcement questions.
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The UK-India trade deal’s social security/social contributions provisions represent a deliberate strategy to drive competitiveness, service connectivity, and labour mobility. By introducing the Double Contributions Convention (DCC), the deal aligns with international norms (such as SSAs) to avoid ‘double contributions’—that is, requiring both employer/employee to pay into two social security systems for the same employment period.
The 36-month exemption is significant: it extends beyond many existing bilateral agreements, which often limit detached worker exemptions to 12–24 months. This favors Indian service providers with frequent short-term deployments, particularly in IT, engineering, and business services, by reducing their cost base. For Indian employees sent temporarily to the UK, this raises net income and makes international assignments more financially viable. Conversely, UK firms sending employees to India benefit similarly, though the volume is likely smaller.
However, the lack of entitlement to UK contributory benefits during the exemption period creates a trade-off. While workers avoid contributions, they also do not accrue corresponding benefits (e.g. state pension credits, unemployment or sickness benefits), which could matter for longer assignments or retirement planning. The deal assumes that the home country scheme is sufficiently comprehensive, and that portability or aggregation of benefits across jurisdictions is workable.
From the UK economic perspective, this concession is part of a broader package aiming to secure market access for UK goods, services, and companies into India. The trade deal predicts increases to UK GDP (~£4.8 billion annually) and bilateral trade (~£25.5 billion annually by 2040) as key components; the DCC supports these by reducing cost barriers in services. However, costs for the UK Government—estimated at ~£100 million annually in foregone contributions—and political repercussions (concerns about fairness, public finances, or migration) could constrain domestic support or implementation.
Open questions remain around the legal text of the DCC (yet to be fully published), monitoring of expatriate flows to ensure the exemption period is not abused, sector-specific impacts, and reciprocity: how many outbound UK workers will make use of the agreement, and how balanced the benefits will be. Additionally, macroeconomic assumptions (trade growth, sector responses, labour mobility) are subject to risk: global economic shocks, visa regimes, and enforcement could shape actual outcomes.
Supporting Notes
- The CETA between UK and India was formally signed on 24 July 2025; negotiating commenced in early 2022.
- The DCC exempts Indian workers in the UK (and vice versa) from host-country social security/National Insurance contributions for up to 36 months if they remain employed by their home country employer.
- The exemption is projected to benefit 60,000-75,000 Indian workers and approximately 900 employers, especially in the IT sector.
- Estimated salary savings of around 20% for affected Indian workers; benefits to employers anticipated to exceed ₹4,000 crore.
- The DCC does not grant rights to UK contributory benefits (e.g., State Pension) during the exemption period; UK migration/visa rules remain in force.
- UK government estimates foregone social security/NIC revenue of roughly £100 million related to the exemption.
- UK projections from the trade deal estimate long-run gains of £4.8 billion to GDP, £2.2 billion to wages, and an increase in UK-India bilateral trade by £25.5 billion annually.