Latest news with #DoubleContributionsConvention
Time of India
5 days ago
- Business
- Time of India
India-UK trade deal: How Indian professionals working in United Kingdom temporarily will benefit from Double Contributions Convention
If an employee is sent to work from India to the UK for an anticipated period of up to 36 months, the social security contributions will need to be paid only in India. (AI image) As a landmark step towards promoting cooperation in the field of social welfare, India and the United Kingdom (UK) have agreed to negotiate a reciprocal Double Contributions Convention (DCC) alongside the signing of Comprehensive Economic and Trade Agreement between the Government of the Republic of India and the Government of the United Kingdom of Great Britain and Northern Ireland ("the CETA") on 24 July 2025. This DCC aims to relieve the burden on employees who are temporarily assigned to work in the other country, as well as their employers, by exempting them from the requirement to pay social security contributions in the host nation. Highlights of the DCC Side Letters On 24 July 2025, India and the UK issued side letters documenting their understanding to agree to the text of the DCC. It is also agreed between India and the UK that the DCC to be concluded between the two countries shall enter into force at the same time as the CETA. While the formal DCC is yet to be negotiated and executed, the side letters provide valuable insights on the overall framework of the DCC. Based on the key features of the DCC highlighted in the side letters, let's examine the implications for Indian employees assigned to work in the UK. If an employee is sent to work from India to the UK for an anticipated period of up to 36 months, the social security contributions will need to be paid only in India. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Learn More - How Watching Videos Can Boost Your Income TheDaddest Undo Even if the employment period in the UK subsequently exceeds 36 months, the social security contributions shall be paid only in India for the first 36 months. During the period of assignment, the Provident Fund contributions in India shall be paid on the total remuneration and profits derived from employment, to the extent permitted under the Indian Provident Fund law. It may be noted that there is a wage ceiling of Rs 15,000 for calculation of Provident Fund contributions, beyond which the contributions are voluntary. The individual will have to take a Certificate of Coverage under the DCC for claiming exemption from the UK social security. Exemption from UK National Insurance Contributions (NIC) Under the current system, individuals who work in the UK are required to deposit UK NIC. The local National Insurance rules exempt employees sent to work temporarily in the UK and their employers from payment of NIC for the first 52 weeks of their stay, subject to certain conditions. By virtue of the DCC, this 52-week exemption period stands extended to 36 months for Indian employees. Conclusion The DCC promises to provide substantial benefits to Indian employees temporarily posted for employment in the UK and their employers, by way of exemptions from the UK NIC. Thus, the UK-India DCC, once implemented, will eliminate a major cost and compliance obstacle for short-term assignments, thereby promoting seamless workforce mobility and maintaining continuity of social security benefits. This article is authored by Puneet Gupta, Partner, EY India Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Indian Express
6 days ago
- Business
- Indian Express
India-UK trade deal: Relief on social security contributions boost for Indian firms, workers
India's trade deal with the UK will provide a boost to domestic services companies, with the two governments agreeing that employees working temporarily for a period of up to three years in the other country will only have to pay social security contributions in their home countries. This will raise take-home salaries and reduce costs for Indian companies, and is expected to benefit around 75,000 Indian workers. The reciprocal Double Contributions Convention (DCC) is in addition to the Comprehensive and Economic Trade Agreement (CETA) that covers nearly 100 per cent of trade value between India and the UK. The DCC ensures employees moving between the two countries and their employers will only have to pay social security contributions in one country at a time. For temporary workers, the DCC ensures that 'fragmentation of their social security record' does not occur, the UK government said on Thursday. According to Prime Minister Narendra Modi, the DCC will inject 'new energy' into the Indian and UK services sectors, particularly in technology and finance. 'It will promote ease of doing business, reduce cost of doing business, and increase the confidence of doing business. Additionally, UK's economy would benefit from India's skilled talent. These agreements will enhance investments and generate new employment opportunities in both countries. Moreover, as agreements reached between two democracies and two of the world's major economies, they will lend support to global stability and global prosperity,' Modi said at the joint briefing with his counterpart, Keir Starmer, on Thursday. A DCC does not cover access to social security benefits and does not change rules on access to benefits. The UK has agreements similar to the DCC with almost 50 countries. India, meanwhile, has such an understanding with 20 countries. According to British media reports, the exemption for India will cost the British government about £100 million. As part of the trade deal, IT and IT-enabled services, financial and legal services, professional and educational services, and digital trade will get greater access to the UK market. 'Indian professionals, including those deployed by companies to work in the UK across all services sectors, professionals deployed on contracts such as architects, engineers, chefs, yoga instructors and musicians, will benefit from simplified visa procedures and liberalised entry categories, making it easier for talent to work in the UK,' the Commerce Ministry said in a statement on Thursday. Services trade is key for India as it enjoys a surplus, compared to a heavy deficit when it comes to merchandise trade. In 2024-25, while India had a total merchandise trade deficit of $287 billion with the rest of the world, it had a services trade surplus of $189 billion. Specifically, India's services exports to the UK rose 16 per cent in 2024 to £14.7 billion, according to data from the Office of National Statistics, while services imports from the UK were flat at £10.1 billion. The exemption on insurance payments to Indian employees temporarily working in the UK has been a source of friction in British politics for years. In 2022, the then Home Secretary, Suella Braverman, had expressed her reservations about the trade deal with India, warning that it could lead to greater immigration to the UK, adding that Indians accounted for the largest number of those who overstayed their visas. More recently, after the deal was announced in May, shadow justice secretary Robert Jenrick said the social security contributions exemption was a sign that Starmer put British workers 'last'. 'This trade deal means Indian workers here for less than three years will not pay national insurance in the UK. Starmer has hiked national insurance on Brits while giving an exemption to Indian migrants. British workers come last in Starmer's Britain,' Jenrick had said on X on May 6. However, the UK government said Thursday that the net impact of the DCC on the British economy was 'significantly positive' and the cost of the DCC agreement 'is likely to be a fraction of the overall deal's economic benefit'. It said the DCC will not make it cheaper for UK firms to hire Indian workers and is not seen to have a long-term impact on net migration. Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy. ... Read More
Hans India
6 days ago
- Business
- Hans India
India, UK ink historic FTA
London: India and the UK on Thursday inked a landmark free trade agreement that seeks to boost both the economies, slash tariff lines across 99 per cent of Indian exports, unlock thousands of jobs and cut tariffs on British whisky, cars and an array of other items. The pact, officially named as the Comprehensive Economic and Trade Agreement (CETA), was signed by Union Commerce Minister Piyush Goyal and British Trade Secretary Jonathan Reynolds in the presence of the prime ministers of India and the UK. The mega deal was formalised shortly after British PM Keir Starmer hosted his Indian counterpart Narendra Modi at Chequers, the countryside residence of the British PM that is located 50 kms northwest of London. The CETA, firmed up after three years of negotiations, is expected to ensure comprehensive market access for Indian goods across all sectors and India will gain from tariff elimination on about 99 per cent of tariff lines (product categories) covering almost 100 per cent of the trade values, officials said. "I'm really pleased and privileged to welcome you here today on what I consider to be a historic day for both of our countries, and the delivery of the commitment that we made to each other," said Starmer, as he greeted PM Modi. In his remarks to the media, Modi said the UK and India are "natural partners" and said the nations were "writing a new chapter" in their history. He highlighted Indian textiles, footwear, gems and jewellery, seafood and engineering goods will get better market access in the UK, with agricultural products and processed food industry winning new opportunities for growth following the trade deal. "This agreement will prove especially beneficial for India's youth, farmers, fishermen and MSME sector. On the other hand, people and industries in India will be able to access products made in the UK such as medical devices and aerospace parts at affordable and attractive prices," Modi said. "Along with this agreement, we have also reached a consensus on the Double Contributions Convention (DCC). This will inject new energy into the services sectors of both countries, especially in technology and finance. It will promote ease of doing business, reduce cost of doing business and increase the confidence of doing business," Modi said.
Indian Express
7 days ago
- Business
- Indian Express
India-UK trade deal: How Indian services firms will receive a boost from social security contributions pact with UK
India's trade deal with the UK will provide a boost to domestic services companies, with the two governments agreeing that employees temporarily working for a period of up to three years in the other country will only have to pay for social security in their home countries. This will raise take-home salaries, reduce costs for Indian companies and is expected to benefit around 75,000 Indian workers. The pact, which is in addition to the Comprehensive and Economic Trade Agreement (CETA) that covers nearly 100 per cent of trade value between India and the UK, is called a reciprocal Double Contributions Convention (DCC). The DCC ensures employees moving between the two countries and their employers will only have to pay social security contributions in one country at a time. For temporary workers, the DCC ensures 'fragmentation of their social security record,' does not occur, the UK government said on Thursday. According to Prime Minister Narendra Modi, the DCC will inject 'new energy' into the Indian and UK services sectors, particularly in technology and finance. 'It will promote ease of doing business, reduce cost of doing business, and increase the confidence of doing business. Additionally, the UK's economy would benefit from India's skilled talent. These agreements will enhance investments and generate new employment opportunities in both countries. Moreover, as agreements reached between two democracies and two of the world's major economies, they will lend support to global stability and global prosperity,' Modi said in London on Thursday in his address at a joint briefing with his counterpart, Sir Keir Starmer. A DCC does not cover access to social security benefits and does not change rules on access to benefits. The UK has agreements similar to the DCC with almost 50 countries. India, meanwhile, has such an understanding with 20 countries. According to reports, the exemption for India will cost the British government about £100 million. As part of the trade deal, IT and IT-enabled services, financial and legal services, professional and educational services, and digital trade will get greater access to the UK market. 'Indian professionals, including those deployed by companies to work in UK across all services sectors, professionals deployed on contracts such as architects, engineers, chefs, yoga instructors, and musicians, will benefit from simplified visa procedures and liberalised entry categories, making it easier for talent to work in the UK,' India's Commerce Ministry said in a statement on Thursday. Services trade is key for India as it enjoys a surplus compared to a heavy deficit when it comes to merchandise trade. In FY25, while India had a total merchandise trade deficit of $287 billion with the rest of the world, it had a services trade surplus of $189 billion. Specifically, India's services exports to the UK rose 16 per cent in 2024 to £14.7 billion, according to data from the Office of National Statistics, while services imports from the UK were flat at £10.1 billion. The exemption on insurance payments to Indian employees temporarily working in the UK and higher number of work visas has been the source of friction in British politics for years. In 2022, then UK Home Secretary Suella Braverman had expressed her reservations about the trade deal with India, warning that it could lead to greater immigration to the UK, adding that Indian migrants accounted for the largest number of visa overstayers. More recently, after the deal was announced in May, Shadow Justice Secretary Robert Jenrick said the social security contributions exemption was a sign that Prime Minister Starmer put British workers 'last'. 'This trade deal means Indian workers here for less than 3 years will not pay National Insurance in the UK. Starmer has hiked National Insurance on Brits while giving an exemption to Indian migrants. British workers come last in Starmer's Britain,' Jenrick had said on X on May 6. However, the UK government said Thursday that the net impact of the DCC on the British economy was 'significantly positive' and the cost of the DCC agreement 'is likely to be a fraction of the overall deal's economic benefit'. The British government added that the DCC will not make it cheaper for UK firms to hire Indian workers and is not seen to have a long-term impact on net migration.
Indian Express
7 days ago
- Business
- Indian Express
India-UK trade deal: Indian textile, gems & jewellery sectors to benefit; medical devices to get cheaper, says PM Modi
At the India-UK trade deal signing ceremony on Thursday, Prime Minister Narendra Modi said the agreement would benefit India's textile, gems and jewellery sectors, and MSMEs, while helping Indians access medical devices and aircraft parts at affordable prices. He said the deal, signed after years of effort, is not merely an economic partnership but also a blueprint for shared prosperity. 'Along with this agreement, we have also reached a consensus on the Double Contributions Convention. This will inject new energy into the service sectors of both countries, especially in technology and finance. It will promote ease of doing business, reduce the cost of doing business, and increase the confidence of doing business,' PM Modi said in London. Additionally, the UK's economy would benefit from India's skilled talent. PM Modi said these agreements would enhance investment and generate new employment opportunities in both countries. Moreover, since the agreements are between two democracies and two of the world's major economies, they would lend support to global stability and prosperity, he said. 'To give new momentum and energy to our comprehensive strategic partnership in the coming decade, today we are launching Vision 2035. Vision 2035 is a roadmap that will form the basis of a strong, trustworthy, and ambitious partnership in the fields of technology, defence, climate, education, and people-to-people connectivity,' PM Modi said. The UK government on Thursday said the trade deal would increase bilateral trade between the two countries by nearly 39 per cent in the long run — equivalent to $34 billion a year compared with projected 2040 levels of trade in the absence of an agreement (currently at $21 billion annually). PM Modi said a defence industrial roadmap had also been drawn up for partnership in defence and security, and work would continue on strengthening the technology security initiative. 'It is our commitment that from AI to critical minerals, semiconductors to cybersecurity, we shall create the future together. In the field of education too, we are writing a new chapter together. Six universities from the UK are opening campuses in India. Just last week, the University of Southampton inaugurated its campus in the city of Gurugram,' he said. 'We have continued to exchange views on peace and stability in the Indo-Pacific, the ongoing conflict in Ukraine, and the situation in West Asia. We support the early restoration of peace and stability. Respect for the sovereignty and territorial integrity of all countries is essential. Today's era demands development, not expansionism,' he added. The UK deal is significant since it marks the beginning of integration between the advanced services sectors of the UK and India. India has finally opened its doors to high-end British cars and whisky, albeit in a phased manner. The India-UK Free Trade Agreement (FTA) ensures comprehensive market access for goods across all sectors, covering all of India's export interests. India will benefit from tariff elimination on approximately 99 per cent of tariff lines, covering nearly 100 per cent of trade value — offering opportunities to boost bilateral trade between India and the UK, according to India's Commerce and Industry Ministry. Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy. ... Read More Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
