NEW DELHI: The 14th round of the India-UK FTA negotiations is underway in New Delhi. Five chapters of the total of 26 remain to be concluded. One of the things India has been pushing for in this FTA is the inclusion of a social security agreement.
"It is important to get a social security agreement as it will help Indian professionals working in the UK. This would ensure that Indians who go on a short-term work visit to the UK don’t lose money in social security contributions that they cannot derive any benefit from eventually," said a source.
India is the second largest investor in the UK, having set up 120 new projects and creating 5,429 new jobs in 2019-20. Over 800 Indian companies in the UK, with consolidated revenues of £41 billion, employ nearly 110,000 people. This represents a major contribution by a Commonwealth partner to the UK economy, with further opportunities for investment. Additionally there are hundreds of thousands of Indian employees on secondment to the UK, also contributing significantly, according to the Confederation of India Industries (CII).
The largest workforce on secondment to the UK from India is from the technology services sector. Typically these Indian companies have branches or subsidiaries in the UK and use the Tier 2 Intra-Company Transfer (ICT) route to obtain certificates of sponsorship for the employees on secondment.
"Indians working in the UK may be required to contribute towards both the Indian and the UK social security schemes. Temporary Indian workers in the UK have a time bound exemption from paying social security, even though they have restricted access to public funds and are unlikely to work in the UK for long enough to accrue any state pension entitlement. If India and the UK enter into an agreement, then Indian employees would be able to claim exemption from social security contributions in the UK by obtaining a Certificate of Coverage (CoC) from the Indian Provident Fund office," said a source.
A social security agreement is likely to include an 'export of benefits' clause which would permit UK authorities to remit any state pension entitlement accrued in the UK directly into India to Indian employees once they have returned home.
The UK has been resisting the social security agreement as there are fewer British nationals working in India than Indians in the UK. Whether India manages to convince the UK to include this agreement in the ongoing round, only time will tell.