India UK FTA: Indian techies to save Rs 30–40 lakh as DCC ends double social security tax

The recently signed Double Contribution Agreement (DCC) between India and the United Kingdom, is part of the comprehensive economic and commercial agreement (CETA) greatly from Indian expatriates who work temporarily in the United Kingdom. Under this agreement, Indian citizens will be exempted from short -term visas from contributing to national insurance contributions in the United Kingdom (NIC) for a period of up to three years, providing savings from 30 to 40 rupees per person. This exemption provides a major financial relief for the relevant expatriates.

About 75,000 Indian workers are scheduled to benefit from short -term visas in the United Kingdom and 900 British employers from the Double Contribution Agreement (DCC), which entered into force as well as signing the comprehensive economic and commercial agreement in the United Kingdom (CETA) on Thursday. DCC exemptes Indian workers and their employers from paying the national insurance contribution to the United Kingdom (NIC) for a period of up to three years. A similar exemption will be applied to British citizens working in India.

DCC aims to prevent dual social security contributions, and to enhance financial security of about 75,000 Indian expatriates and 900 Indian employers. The ministry officials, as Hindu Busonsline stated that the Mediterranean Information Technology, who receives approximately 50,000 pounds per month, will contribute to 23 % of their salaries in the employee Fund Organization in India (EPFO) instead of the UK system, ensuring great savings. This is expected to provide a safer economic future for workers.

“The formal costs of the official cost of workers in work by the Ministry of Labor and Employment have been evaluated at the time of preparing the union cabinet note before negotiations with the United Kingdom to get rid of the double social security contributions by the expatriates working in Britain,” a senior official. The agreement reflects a broader spirit of the International Labor Organization, which calls for equality with all workers, including immigrants. Such principles are an institution for fair work practices in the world.

The UK expects economic gains from the deal, with expectations that expectations indicate an annual addition of 4.8 billion pounds to GDP and support 2.2 billion pounds of wages in the United Kingdom. “When agreeing to negotiate DCC with India, the government took into account the benefits of the broader commercial deal,” the UK administration referred to the expected mutual benefits of this bilateral arrangement. These expectations highlight the possibility of significant economic growth and improve the conditions of labor market.

Social security arrangements

For India, the agreement is compatible with the current social security arrangements with 22 other countries, and the Moody government hopes to negotiate similar conditions with the United States. The deal is expected to simplify social security contributions, which makes it easier for companies and employees to manage their financial resources. This compatibility with international standards is very important to enhance global economic partnerships.

Financial effects are great. With the redirects to EPFO, Indian workers can expect improved financial results when completing their duties in the United Kingdom. Moreover, NIC’s exemption in the United Kingdom can be translated into great cost savings for both employees and employers. This financial strategy supports long -term economic stability for expatriates.

The UK hosts 1,197 companies owned by the Indians-by 23 % of 971 in 2024-which employs 126,720 people with combined revenues of 72.14 billion pounds, according to Grant Thornton in the United Kingdom.

India has already has social security agreements with 22 countries, and the Ministry of Labor urged priority to give priority to similar plans in future free trade agreements, especially with countries such as the United States that has a large covered Indian base.

The broader context of CETA and DCC reflects a strategic step not only to protect expatriate workers but also to enhance economic relations between India and the United Kingdom. This agreement is seen as a proactive measure to enhance competitiveness and economic cooperation on both sides.