India-UK social security pact first step to free trade agreement |
Long term allies, India and the United Kingdom, are back to discussing a social security agreement aimed at allowing Indian IT firms to avoid paying mandatory national insurance for their overseas Indian staff. This comes as the two nations are keen to bolster their post-Brexit engagement. This is the first step in a roadmap to a UK-India free trade agreement. The two sides had agreed, at the 14th Joint Economic and Trade Committee meeting between the two countries last month, to establish an “enhanced trade partnership". The partnership has two broad strategies, one involves addressing and removing non-trade barriers such as for high skilled professionals in the UK and the other envisages identifying tariff barriers and getting into a dialogue. Indian tech companies, which depute its employees to work in the UK, the second-largest market for India`s service exports after the US, end up paying for social security in both India and the UK. National insurance in the UK is a form of contributory tax paid by all UK residents, ensuring access to free health, education, access to pension, maternity benefit, jobseeker`s allowance, and support allowance in case of illness and disability when an individual is not able to work. In India, the Indian IT-ITeS companies also have to contribute towards social security for their employees. This has been a topic of concern for the tech companies for some time now.
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