Social security pact with UK to benefit Indians, Pg17

Key Highlights:

• India and the UK have finalized a social security agreement, officially known as the Double Contribution Convention (DCC).
• This pact, effective from July 15, 2026, will benefit approximately 90-95% of Indian professionals employed by Indian firms in the UK.
• It exempts temporarily transferred employees from paying social security contributions in the UK for up to five years, provided they continue contributions in India.
• The agreement is expected to save Indian firms and professionals at least £500 million annually.
• The DCC will be implemented alongside the Comprehensive Economic and Trade Agreement (CETA) between India and the UK.

Detailed Insights:

• The Double Contribution Convention (DCC) aims to prevent employees and employers from making double social security contributions when an employee is on a short-term assignment.
• The exemption period for social security contributions in the host country has been extended from the original three years to five years.
• This measure is particularly beneficial for the services sector, including information technology, financial services, and professional services.
• Indian companies will need to obtain a Certificate of Coverage (CoC) from the Indian government to avail of this exemption.
• The agreement is reciprocal, with India offering similar benefits to UK nationals working temporarily in India.
• It is expected to boost the competitiveness of Indian service providers in the British market by reducing operational costs.
• The pact will support the mobility of skilled professionals and ensure continuity of social security coverage for employees on overseas assignments.

Key Concepts Involved:

• Social Security Agreement (SSA): A bilateral arrangement between countries to protect cross-border workers from double social security contributions.
• Double Contribution Convention (DCC): A specific type of Social Security Agreement that coordinates the payment of social security contributions.
• Certificate of Coverage (CoC): A document issued by a home country's social security authority confirming an employee's continued coverage under their home country's scheme.
• Comprehensive Economic and Trade Agreement (CETA): A broad trade pact between two countries aimed at reducing tariffs and non-tariff barriers to trade and investment.