India and the United Kingdom have successfully concluded negotiations for a landmark Free Trade Agreement (FTA), marking a significant milestone in their expanding economic partnership. The deal, the first major trade pact between the two nations, is expected to boost bilateral trade and deepen economic collaboration, with a target of doubling bilateral trade to $120 billion by 2030. Notably, trade between the two countries increased to $21.34 billion in 2023–24 from $20.36 billion in 2022–23. The average duty on goods imported from India into the UK is 4.2%.
The FTA builds on discussions held between Prime Ministers Narendra Modi and Keir Starmer at the G-20 summit in Rio de Janeiro in November 2024. Following this, intense negotiations resumed in February 2025, led by India’s Commerce and Industry Minister Piyush Goyal and UK Secretary of State Jonathan Reynolds, along with their respective teams.
One of the standout features of the agreement is the inclusion of the Double Contribution Convention, which has been hailed as a game changer for Indian workers in the UK.
“The signing of the Double Contribution Convention alongside the UK-India Free Trade Agreement is a landmark step that will ease the cost burden for Indian companies sending talent abroad, especially in the IT and consulting sectors. By eliminating dual social security contributions, India enhances its global competitiveness while ensuring greater mobility for professionals. Coupled with reduced tariffs and wider market access under the FTA, this move is poised to catalyse export led growth and investment flows—particularly in sectors like auto components, IT, etc. This is a win-win for both economies and a strong signal of India’s rising stature in global trade diplomacy,” said Atul Pandey, Partner, Khaitan & Co.
According to a government release, “The exemption for Indian workers who are temporarily in the UK, and their employers, from paying social security contributions in the UK for a period of three years, will lead to significant financial gains for Indian service providers. This will enhance their competitiveness in the UK market, create new job opportunities, and benefit a large number of Indians working in the UK.”
What Is the Double Contribution Convention?
The Double Contribution Convention is a key component of the India-UK FTA, aimed at preventing individuals from paying double social security contributions when they work or live in both countries. Social security contributions are payments made by workers and employers to fund pensions, healthcare, unemployment benefits, and other welfare programmes.
India already has social security agreements (SSAs) with countries like Belgium, Germany, Switzerland, France, Denmark, Korea, and the Netherlands. Under these agreements, Indian employees do not have to contribute to local social security schemes abroad. Instead, they and their employers can continue contributing to the Employees’ Provident Fund Organisation (EPFO) in India while they are posted overseas.
Until now, this was not the case with the UK, where Indian businesses faced a heavy cost burden. As of 2021 data, the compulsory National Insurance (NI) contributions of skilled Indian workers in the UK on temporary visas amounted to an additional £500 per employee annually. This cost came on top of other taxes and the health surcharge paid towards the National Health Service (NHS).
In today’s globalised world, many professionals work across borders. Without this convention, they risk being subjected to dual social security payments without receiving equivalent benefits from both systems. This could cause financial strain as workers may end up paying double contributions.
The Double Contribution Convention resolves this by allowing contributions to be made solely in the home country. This not only simplifies administrative processes but also reduces the financial burden on Indian workers and their employers.
Source: cnbctv18.com
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