Image used for representational purpose only.
Image used for representational purpose only.

As talks enter 14th round, India wants social security clause in FTA with UK

This is a major contribution by a Commonwealth partner to the UK economy, with further opportunities for investment. 

NEW DELHI:  India has been pushing for the inclusion of a social security agreement during the ongoing Free Trade Agreement negotiations with the UK. As the 14th round of talks is underway in New Delhi, five chapters out of the 26 remain to be concluded. 

“It is important to get a social security agreement as it will help Indian professionals working in the UK, especially those who go on a short-term work visit, and have to make 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 created 5,429 new jobs in 2019-20. Over 800 Indian companies in the UK, with consolidated revenues of £41 billion, employ nearly 1,10,000 people. This is a major contribution by a Commonwealth partner to the UK economy, with further opportunities for investment. 

Additionally, there are thousands of Indian employees on secondment to the UK, also contributing significantly, according to the Confederation of India Industries. “Indians working in the UK may have to contribute towards both the Indian and the UK social security schemes.

Temporary Indian workers 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 by obtaining a Certificate of Coverage 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 to India once the employee has returned to the country. The UK has been resisting the social security agreement as there are fewer British nationals working in India than Indians in the UK. 

Restricted access
Indians working in the UK may have to contribute to both the Indian and the UK social security schemes. Temporary workers have a time-bound exemption from paying social security, even though they have restricted access to public funds. 

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