India has been advocating for the incorporation of a social security agreement as part of the ongoing Free Trade Agreement (FTA) negotiations with the United Kingdom. As the 14th round of discussions unfolds in New Delhi, five out of the 26 total chapters remain to be finalized. The inclusion of a social security agreement is deemed essential, particularly for Indian professionals working in the UK, including those on short-term work visits. Such an agreement would alleviate the burden of making social security contributions that may not yield any benefits in the future.
India stands as the second-largest investor in the UK, with a substantial presence through the establishment of 120 new projects and the creation of 5,429 jobs in the 2019-20 period. Over 800 Indian companies operating in the UK, with combined revenues amounting to £41 billion, employ nearly 110,000 individuals. This represents a significant contribution from a Commonwealth partner to the UK economy, with prospects for further investment. Moreover, a considerable number of Indian employees are on secondment to the UK, also making substantial contributions. Establishing a social security agreement would potentially allow Indian employees to claim exemptions from social security contributions by obtaining a Certificate of Coverage from the Indian Provident Fund office.
The potential social security agreement is likely to encompass an ‘export of benefits’ provision, which would enable UK authorities to transfer any state pension entitlement accrued in the UK directly to India once the employee returns to their home country. The UK’s resistance to the agreement primarily stems from the fact that there are fewer British nationals working in India compared to the number of Indians employed in the UK.
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