Latest news with #UKIndiaTradeDeal
Times
20-05-2025
- Business
- Times
Indian trade deal ignores legal services
Five years after the UK waved goodbye to the EU amid enthusiastic forecasts of an independent trading future, British ministers are finally cutting deals. One of the biggest plums being touted by now Labour ministers unavoidably triggers memories of hundreds of years of colonial history: a UK-India pact that is the biggest trade deal since Brexit. Although details of the agreement struck last week remain scant, it is anticipated that when it comes into effect next year, the deal will lower tariffs on goods that Britain exports to India, such as whisky, cars and aerospace products. British consumers will in turn benefit from cheaper goods from India, including foodstuffs, textiles and jewellery. But while champagne corks popped across Whitehall, in Chancery Lane there was disappointment
Yahoo
17-05-2025
- Business
- Yahoo
UK-India trade deal: how the social security arrangements will work
When you buy through links on our articles, Future and its syndication partners may earn a commission. A landmark trade deal has been agreed between the UK and India but there are concerns over the National Insurance concessions it contains for Indian workers. The UK government claimed the deal was a win for working people and British business, pointing to reduced tariffs on goods such as whisky, gin and chocolate. It is an agreement that has been in the making since 2022 and touted as a "big Brexit boon", said The Guardian. But since the announcement there have been "political fireworks", said Politico, namely over a perceived relaxation of social security or National Insurance payments for Indian workers in the UK. The UK-India trade deal includes what is known as a "double contributions convention", where "neither Indian nor British workers" will need to pay National Insurance contributions "in both their home country and the one they are working in", said Politico. Instead, workers will only need to pay it in one nation for the first three years of their placement. But the announcement means ministers have been "left on the defensive", said The Times, as critics claim Indian workers will be "paying less in tax than their British counterparts for doing the same job". It comes after the government controversially increased employer NI payments during the Autumn Budget. Conservative leader Kemi Badenoch described the NI issue in the UK-India trade deal as "two-tier taxes from two-tier Keir". Business secretary Jonathan Reynolds has insisted the deal "would not impact British workers", said the BBC, stating the UK has 16 agreements designed to prevent "double taxation of work". Such agreements cover more than 50 countries, "including the US, EU and South Korea". Even influential Tory figures such as Oliver Dowden and former Brexit minister Steve Baker have backed the deal, said The Guardian, highlighting that opt-outs for seconded workers "were routine in trade deals". Delhi has also argued that its workers "would not receive any of the benefits that National Insurance is supposed to pay for", said The Times, such as pensions and welfare payments. The exemption also doesn't apply to all Indian nationals working in the UK, said FullFact, "though this hasn't been made clear". Trade minister Douglas Alexander told LBC the exemption would be for "a very specific and limited group of Indian business people for a period of three years". Indian workers seconded here will still have to pay the UK immigration health surcharge on NHS care, said FullFact. Plus, the arrangement is reciprocal. Consequently, British workers sent by their companies to work in India will benefit as "they won't have to make Indian social security payments for up to three years".
The Independent
07-05-2025
- Business
- The Independent
Starmer brands criticism of UK-India trade deal ‘incoherent nonsense'
Sir Keir Starmer dismissed opposition criticism of tax exemptions in the UK- India trade deal as 'incoherent nonsense' as he insisted the agreement was a 'huge win' for Britons. The Prime Minister defended the arrangement, which will allow some Indian workers transferred to Britain to temporarily avoid paying social security in this country and vice versa, following attacks from the Tories and Reform UK. Speaking in the Commons, Sir Keir said similar reciprocal agreements exist between the UK and 50 countries and challenged opponents to say whether they would also 'tear up' those pacts on the same grounds. Conservative leader Kemi Badenoch and Reform leader Nigel Farage have both claimed the double contributions convention amounts to 'two-tier' tax following the rise in employer national insurance contributions for UK firms. The provision temporarily exempts some Indian workers transferred to Britain and some UK workers sent to India from paying social security contributions in the destination country. During Prime Minister's Questions on Wednesday, Sir Keir said: 'The criticism on the double taxation is incoherent nonsense. It's a benefit to working people. It's in the agreements that we've already got with 50 other countries. 'And if the member for Clacton (Mr Farage) or the Leader of the Opposition is seriously suggesting that they're going to tear up agreements with 50 other countries create a massive hole in our economy, they should get up, and they should say so.' He said the deal, which is the biggest trade agreement since Brexit, was a 'huge win' for the UK. Ministers say the long-coveted pact will add £4.8 billion a year to the economy by 2040, with dramatic reductions to levies on scotch whisky, car and other exports from Britain. Under the terms of the deal, UK staff in India would remain subject to national insurance, but be exempt from Indian levies, while Indian staff in the UK would continue to pay into their own system and not Britain's, for three years. Business Secretary Jonathan Reynolds dismissed suggestions that the deal would undercut British workers as he faced questions from broadcasters earlier on Wednesday. He pointed to similar deals with the EU, the US, Canada and Japan, saying that the previous Conservative government signed a similar deal exempting Chilean workers from national insurance for five years. Seconding Indian staff to the UK will also involve additional costs such as the immigration health surcharge and relocation costs, Mr Reynolds said. He added that the overall impact of the deal would mean more tax revenue for the Treasury, and said he expected more UK workers to be seconded to India as a result of British companies gaining access to Indian government procurement contracts. Speaking to Sky News, he added: 'This is not a tangible issue. This is the Conservatives – and Reform – unable to accept that this Labour Government has done what they couldn't do and get this deal across the line.' Mr Reynolds also dismissed reports that the Home Office had not been informed about the terms of the deal until shortly before it was announced, saying it was 'absolute nonsense reporting'. The deal includes some easing of rules on 'business mobility' for temporary visitors and up to 1,800 chefs, yoga instructors and musicians providing contracted services. Downing Street was unable to provide estimates of how the deal may impact immigration or tax-take in Britain. The Prime Minister's official spokesman said: 'We don't do individual line-by-line assessments on free trade deals.' He said the UK and India have not agreed the 'final details' of their social security deal and that the Office for Budget Responsibility (OBR) would provide a fiscal assessment once the agreement was ratified. The deal, which has lowered tariffs on UK exports including whisky, gin and cars as well as imports of clothing from India, is estimated to add '£4.8 billion to GDP per year' from 2040. But the Tories have seized on the national insurance contribution (NICs) exemptions as what they claim amounts to an 'astonishing betrayal of British workers' by rewarding overseas labour. Shadow business minister Dame Harriett Baldwin told MPs the arrangement would be 'subsidising Indian labour while undercutting British workers'. 'A double contribution convention will come at a significant cost to the British taxpayer and to British businesses,' she told the Commons on Tuesday. Reform UK leader Nigel Farage described the deal as 'truly appalling', adding: 'This Government doesn't give a damn about working people. The Labour Party has this time in a big, big way betrayed working Britain.'
The Guardian
07-05-2025
- Business
- The Guardian
Tory Brexiters contradict Badenoch criticism of UK-India trade deal
A series of senior Conservatives have contradicted Kemi Badenoch after she criticised a landmark UK-India trade deal because it temporarily exempts seconded Indian workers from national insurance payments in the UK. Tories including Oliver Dowden, who was deputy prime minister under Rishi Sunak, said the deal should be hailed as a dividend of Brexit that would bring economic growth and cheaper goods from India. The deal was announced on Tuesday after more than three years of negotiations. It cuts tariffs on a series of goods and will add an estimated £4.8bn a year to the UK economy by 2040. In an initial response, the shadow trade secretary, Andrew Griffith, praised it, saying it showed the government recognised 'that reducing cost and burdens on businesses in international trade is a good thing, and that thanks to Brexit, we can do'. But later on Tuesday the tone changed, with Robert Jenrick, the shadow justice secretary – who regularly roams beyond his brief – tweeting that the national insurance exemption, which applies mutually to seconded UK workers in India, showed that 'British workers come last in Starmer's Britain'. Badenoch, the party leader, soon followed suit, saying in a tweet that this was 'two-tier taxes from two-tier Keir'. But several influential Tories and figures from the pro-Brexit camp pointedly disagreed, noting that such opt-outs for seconded workers, which prevent double taxation, were routine in trade deals and had featured in some negotiated under the Conservatives. Dowden, who is still an MP, welcomed the deal, writing on X that it 'builds on significant progress made by [the] previous Conservative government'. Steve Baker, who dealt with trade as a Brexit minister under Theresa May, wrote: 'This deal is great news. It further cements the path which I and others worked so hard to secure … The tax issue will likely turn out to be a red herring. We should be celebrating that a Labour government has furthered free trade in the national interest outside the EU.' Another leading Tory Brexiter, Jacob Rees-Mogg, who was business secretary under Liz Truss, tweeted: 'Cheaper food and drink including rice and tea, footwear and clothing thanks to a welcome trade deal with India. Exactly what Brexit promised.' Praise for the deal – and scepticism about Badenoch's view – also came from some influential Brexit campaigners. In an opinion piece for the Telegraph, Daniel Hannan, a Tory former MEP who is now a peer, wrote that the UK had 'pulled off something that no other country has, at least not on anything like the same scale'. Noting that some people had criticised the deal based on the tax issue, as well because of worries about its impact on migration and apparently uneven tariff reduction, he wrote: 'All three are nonsense.' Shanker Singham, a pro-Brexit trade economist who advised Liam Fox when he was international trade secretary, wrote on X: 'This is a significant achievement for UK trade policy. If the UK can lock in a deal with the US, it will be one of the few countries with deals with the key trade players.' He approvingly retweeted a post from another trade expert who pointed out that in 2012 under the Conservative-Liberal Democrat coalition, a UK-Chile trade deal exempted seconded Chilean workers from UK national insurance contributions for five years – compared with three years in the India deal. Defending the deal on Wednesday, the business secretary, Jonathan Reynolds, said he expected that the deal overall would bring a net contribution to tax revenues, not a deficit. 'This is not a tangible issue,' he told Sky News. 'This is the Conservatives – and Reform – unable to accept that this Labour government has done what they couldn't do and get this deal across the line.'
Daily Mail
07-05-2025
- Business
- Daily Mail
Scrambling ministers insist £5billion India trade deal will NOT 'undercut' British workers amid row over 'two-tier' tax exemption
The UK-India trade deal will not undercut British workers, a top minister insisted today amid a row over a tax break for migrant workers. Business secretary Jonathan Reynolds, the architect of the agreement, came out swinging this morning as Labour faced a major backlash to the £5bn agreement announced yesterday. Under the agreement, tens of thousands of temporary Indian workers will be exempt from paying National Insurance in Britain, making them cheaper to hire. New Delhi heralded the deal as an 'unprecedented' win, but the UK Prime Minister was accused of introducing 'two-tier taxes' after National Insurance contributions for British firms were increased in last year's Budget. Writing for MailOnline, shadow business secretary Andrew Griffith said it could put 'hardworking Brits and British companies ... at a competitive disadvantage against Indian companies bringing in Indian workers'. But Mr Reynolds this morning said critics of the deal were 'confused' and suggested unhappy Tories were jealous they had not managed to achieve a deal when they were in government. Speaking to the BBC he said the UK has similar deals with 50 other countries including the US, Japan and Chile, the latter getting a five-year exemption from the Tories a few years ago. Asked whether the agreement meant Indian workers paying less tax than British counterparts doing the same job, Mr Reynolds told the Today programme: 'No.' He added: 'There is no situation where I would ever tolerate British workers being undercut through any trade agreement we would sign. That is not part of this deal. 'What the Conservatives are confused about, and Reform as well, is a situation where a business in India seconds someone for a short period of time to the UK, or a UK business seconds a worker to India for a short period of time, where you don't pay in simultaneously now to both social security systems.' The agreement will see workers who are seconded to the UK offices of Indian-based employers, or a multi-national with offices in the country, exempt from NI for the first three years – allowing them to avoid paying both at home, as per Indian law, and in the UK. The firm will also not have to pay the contributions. The deal will be reciprocal for British workers transferred to workplaces in India. Officials have not provided an assessment of the cost or impact on UK businesses. The change is understood to have been a key demand by New Delhi's negotiators who said the agreement, which has been three years in the making, will result in 'significant financial gains' for Indian companies. The deal will also see the UK lower tariffs on clothes, shoes and food such as frozen prawns from the subcontinent, in exchange for reciprocal cuts for products including whisky and cars. The tax break was not mentioned by Downing Street in its announcement. But a statement by the Indian government said it would 'lead to significant financial gains for the Indian service providers and enhance their competitiveness in the UK market that would create new job opportunities as well as benefit large number of Indians working in the UK'. Grim figures yesterday revealed the UK's services sector had shrunk for the first time in 18 months, blamed on the NI increase – which came into force in April – and Donald Trump's trade war. Ministers say the long-coveted agreement will add £4.8 billion a year to the economy by 2040, with dramatic reductions to levies on scotch whisky, car and other exports from Britain. More than a dozen rounds of talks involving successive governments have taken place since 2022. Mr Reynolds and Indian commerce minister Piyush Goyal held final talks in London last week after relaunching negotiations two months ago. 'Two-tier' Keir has sold British workers down the river, writes Andrew Griffith Keir Starmer campaigned energetically for a second referendum with free movement of people. He used every trick in the book to try and prevent the UK leaving the EU. He blocked our Brexit deal 48 times when he was Jeremy Corbyn's bag carrier. How ironic then, that he is the biggest beneficiary of a Brexit benefit – the India trade deal. I am yet to hear Labour Ministers crowing about the India Trade deal thank Brexit through gritted teeth for this free trade arrangement. I won't hold my breath. Unlike the EU, India is on the up. It has an outstanding entrepreneurial spirit and British businesses do well exporting Scottish Whisky, cars, and high-tech aerospace products there. It's why we spent three long years doing the hard yards negotiating the deal. It could boost our economy, provide some relief to bosses battered by this Labour government and improve trade with one of the fastest growing economies in the world. But it seems that, as per usual, when Labour negotiates, Britain loses. And today, it is truer than ever – Two tier Keir has been up to his usual tricks, and sold British workers down the river. Whilst Labour have hiked the Jobs Tax on British workers, they have given a tax cut to Indian workers. That means hardworking Brits and British companies could be at a competitive disadvantage against Indian companies bringing in Indian workers. Unsurprisingly, there was no mention of this own goal in any UK government announcement. But Narendra Modi proudly announced it himself and exposed what Keir Starmer tried to bury from the British public. Labour tried to cover it up, but it was never going to work when the Indian government was so delighted with its negotiating victory. They've been caught in the act. It means India's biggest win is flooding the UK market with its people. Bizarrely, under this deal, yoga teachers, buskers and takeaway chefs now qualify as skilled labour – meaning they will also be able to bring their dependents. Keir Starmer seems determined to make us the soft touch immigration capital of the world and never misses an opportunity to surrender. Already, because of Labour's choices, business confidence is tanking, prices are up and growth is down, all while immigration and taxes are at record highs. In Labour's desperation to try and undo some of the damage they have levelled on British businesses, they risk making everything significantly worse. As with all of these things, the devil is in the detail. And we will look closely at the details of this deal, but it already seems to be unravelling before our eyes.
