India and the United Kingdom have successfully concluded negotiations for a landmark free trade agreement (FTA), marking a significant milestone in their growing economic partnership. The deal, the first major trade pact between the two nations, is expected to boost bilateral trade and deepen economic collaboration with the target of doubling bilateral trade between India and UK to $120 billion by 2030.The bilateral trade between India and the UK 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 FTA 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 teams.One of the key aspects of the FTA is the double contribution convention, which has been hailed as a game-changer for Indian workers in the UK.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, designed to prevent 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.In a globalised world, many individuals work in multiple countries. Without this convention, someone working in both India and the UK could be required to pay social security contributions in both countries for the same work, even though they wouldn’t receive benefits from both systems. This situation could lead to financial strain as workers may end up paying double contributions.Under the convention, contributions are generally made to the home country, simplifying the process and easing the financial burden for individuals who work across borders.
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India-UK FTA | The double contribution convention explained
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