Social Security

United Kingdom | United Kingdom and India agree on a Free Trade Agreement

Summary

After almost 3.5 years of negotiations between the United Kingdom and India, both countries have now concluded discussions and agreed a new Free Trade Agreement (FTA) and Double Contribution Convention (Social Security Agreement) in a welcomed and historic milestone for both countries.

The detail

On 6th May, the United Kingdom and India announced their agreement to Free Trade and Social Security agreements.

Social Security

In the case of the latter, this agreement will allow for the protection and ongoing liability to home social security legislation only (by way of a Certificate of Coverage which grants an exemption from contributions in the host location) when individuals are posted temporarily to work between these locations, aiming to protect the interests and benefit continuity of skilled cross border professionals.

At this time, whilst the specific details of the Social Security Agreement are yet to be confirmed, it is expected that the period of coverage under the United Kingdom/India agreement for individuals working in either country is up to 3 years, a move seen by India officials as an ‘unprecedented achievement’ for Indian workers and their employers, making Indian Service Providers significantly more competitive in the United Kingdom.

Immigration

Whilst we await the agreement to be published, specific details of any changes to United Kingdom immigration rules are not yet known, although a government press release has stated that the negotiations and resulting agreement have ensured that “the points-based immigration system is not affected”. Conversely, reports in India suggest that ‘the FTA eases mobility for professionals including contractual service suppliers, business visitors, investors, intra-corporate transferees, partners and dependent children of intra-corporate transferees with right to work, and independent professionals like yoga instructors, musicians and chefs.’ It remains to be seen what this will mean in practice.

What’s next?

The introduction of a Free Trade Agreement and a new social security agreement between the United Kingdom and India has been a long time coming, and whilst not yet in force, we look forward to reviewing the agreement in full once the detail has been finalised.

In particular, whilst some details such as the the coverage period for a Certificate of Coverage of 3 years has already been confirmed, it will be interesting to see:

• Scope of persons covered (e.g. third country nationals)
• Whether an exceptions article will be included to potentially prolong home country coverage by mutual agreement on a case by case basis
• From a United Kingdom perspective, whether this new agreement will unlock the potential for retrospective Provident Fund refunds as has been the case with recent new agreements with India (e.g. Brazil)
• Confirmation as to the transitional measures in place for persons working between United Kingdom/India at the point in which the agreement comes into force
• What changes might be implemented from a United Kingdom immigration perspective and if as some speculation suggests the exemption is linked to those on “short term visas”.

Our experts at Vialto Partners will continue to monitor the progression of this new agreement closely and will provide further updates when the specific details of this new agreement are finalised. In the interim, please feel free to reach out to your regular Vialto Partners contact, or via the information below should you wish to discuss this further.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Ian Robinson
Partner

Gary Chandler
Director

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