India-UK Pact Ends Double Social Security Payments

• India and the UK signed an agreement to stop double social security payments for short-term workers
• Around 75,000 Indian professionals in the UK will benefit, and companies will save money
• The pact is part of a bigger trade deal and makes it easier for skilled workers to move between the countries

India and the United Kingdom have established their first social security agreement, which eliminates double contribution requirements for workers who have temporary international work assignments.

The new policy will provide financial assistance to Indian professionals working in the UK and create better business opportunities for them. The New Delhi agreement between Foreign Secretary Vikram Misri and British High Commissioner Lindy Cameron permits employees who work abroad for three years to avoid social security payments in both countries.

The MEA stated, “The agreement seeks to avoid double social security contributions for employees of both countries on temporary assignments in each other’s territories for periods of up to 36 months”.

The ministry added, “The agreement will support mobility and continued social security coverage of the employees on short-term overseas assignments”.

The new regulations will reduce financial responsibilities for both employees and businesses while strengthening economic connections between the two countries. The agreement permits Indian and UK workers who have temporary work contracts lasting up to 36 months to skip social security payments in both countries.

The MEA noted, “This will enhance India-UK partnerships in the service sector, leveraging the high skills and innovative service sectors of both countries”.

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The current system provides significant benefits to Indian businesses in the United Kingdom, which include major IT companies that send employees for temporary assignments to work on their projects.

“The agreement forms part of India’s trade deal with the UK and shall come into effect together with the CETA, planned for implementation during the first half of the current year”, the MEA added.

The workers and their employers faced increased operational expenses because they had to make simultaneous contributions to both India and the United Kingdom.

The agreement exists as a component of the India-UK Comprehensive Economic and Trade Agreement (CETA), which both countries signed in July last year to establish a special social security agreement between them. The officials believe that CETA, combined with this new agreement, will create better economic ties between countries and enable skilled workers to move between borders.

Eligible employees need to obtain Certificates of Coverage, which confirm their exemption from making dual contributions to access the benefits. The ministry stated, “The signed agreement will be hosted on the website of the Ministry of External Affairs and the website of the Employees’ Provident Fund Organisation for the information of the stakeholders so that they can secure Certificates of Coverage to avoid making double social security contributions”.

The experts predict that the agreement will create positive results for approximately 75,000 Indian professionals during the next few years, especially in the fields of IT, engineering, consultancy, and financial services.