Revised social security pact with U.K. could save $500 million for Indian firms and workers

The agreement on social security that India and the U.K. have signed and that will come into force on July 15 will save Indian companies and workers there about $500 million worth of social security payments that they otherwise would have had to pay in the U.K., according to sources in the Ministry of Commerce and Industry. 

The original Agreement on Social Security, also referred to as the Double Contribution Convention (DCC), was signed in July 2025. It exempted companies in the U.K. from paying social security for the temporary Indian workers they employed for a period of three years, as long as they paid social security in India during that period.

On Wednesday (June 17), both governments announced that the DCC would come into effect on July 15 along with the Comprehensive Economic and Trade Agreement (CETA) between India and the U.K. 

India is also “happy that its concerns have been addressed” regarding the U.K.’s recent steel tariff announcements, which had temporarily halted the implementation of the CETA.

No social security payments for most

As per the revised agreement, the social security exemption limit has now been increased to five years, which will cover about 90-95% of the Indian workers in the U.K. and stands to significantly reduce costs for Indian companies operating in the U.K.   

“We have more than 75,000 workers from India working in the U.K. and there are more than 900 Indian companies that are at present operational in the U.K.,” an official in the Commerce Ministry explained on the condition of anonymity since the matter is confidential until July 15. 

“On the basis of their minimum salary levels, the savings to Indian companies in the U.K. employing temporary Indian workers will come to more than half a billion dollars,” the official added.

Past imbalances rectified

The issue that had arisen was that, in the absence of a DCC, companies employing Indian workers had to pay social security for these workers in India as well as in the U.K. Most of these workers were in the U.K. for up to a period of five years. However, the benefits from social security in the U.K. accrue only after 10 consecutive years of contribution. 

“This meant that most of the Indian workers there were paying double social security, and also were not able to get any benefit from the U.K. social security system,” the official added. “Now, with the exemption increased from three to five years, this covers about 90-95% of the temporary Indian workers in the U.K.” 

Companies will need to obtain a certificate from the Indian government confirming that social security was being paid here, which they can submit to the U.K. government in order to avail of the exemption. 

Trade deal speedbumps fixed

The CETA was also signed in July last year and was supposed to be implemented by early May 2026. However, a fresh U.K. regulation on steel import tariffs temporarily — which had not been part of the CETA negotiations — brought the trade deal proceedings to a halt as both countries scrambled to find a solution without having to redo the CETA itself. 

“If you look at this steel measure in detail, 85% of our steel exports to the U.K. was out of this,” a second official explained. “Out of about $890 million of steel export that we do to the U.K., only $137 million was getting affected.” 

“We have arrived at a deal on this steel measure, which has taken care of our concerns,” they added. “It was finalised only yesterday afternoon [hours before the deal was announced]. India will not lose any market access, and will have a decent market access in the affected portions. We are satisfied with the overall deal. We are happy that our concerns on steel have been addressed.” 

The two officials would not reveal details of what concessions India has obtained regarding the steel tariffs as the matter was still extremely sensitive for the U.K., which was still negotiating with other countries on the matter. 

However, they said that the leeway granted to India would be in the form of a mix of country-specific quotas, residual quotas and access under authorised-use schemes. The details will be available on July 1, when the U.K.’s tariffs come into effect.