• After three years of negotiations, India and the United Kingdom sealed a landmark Free Trade Agreement (FTA) on May 7.

• Alongside the FTA, the UK and India have agreed to negotiate a reciprocal Double Contributions Convention (DCC).

• The DCC will support business and trade by ensuring that employees moving between the UK and India, and their employers, will only be liable to pay social security contributions in one country at a time.

• The DCC will also ensure that employees temporarily working in the other country for up to three years will continue paying social security contributions in their home country, preventing the fragmentation of their social security record. 

• This agreement will operate on similar principles to the UK’s other Social Security Agreements (SSA) with the EU and countries such as Switzerland, Norway, Canada, Japan, Chile and South Korea. 

• As a more limited kind of SSA, the DCC will not affect individuals’ rights to access benefits from the country in which they pay social security contributions or the requirement to pay the UK immigration health surcharge. 

• The DCC will enter into force alongside the FTA.

• It was a long-standing demand of Indian businesses operating in Britain to cut down on the additional cost burden associated with bringing in skilled Indian professionals on a short-term basis.

• Currently, Indian professionals working for a limited period in Britain contribute to their social security funds, but are not able to get their benefits as they return once the projects are complete.

• The compulsory National Insurance (NI) contributions of skilled Indian professionals in the UK on temporary visas remain an additional cost burden of about £500 per employee a year, over and above all other taxes and health surcharge paid towards the National Health Service (NHS), as per 2021 data.

• India has social security agreements with countries like Belgium, Germany, Switzerland, France, Denmark, South Korea, and the Netherlands.

• Thus, Indians going abroad for employment are not required to contribute towards social security schemes in these countries.

• They and their employers can continue with social security schemes run by the Employees’ Provident Fund Organisation (EPFO) here in India while serving abroad.

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