After the successful conclusion of negotiations on a trade deal announced on 6 May 2025, United Kingdom (the UK) and India have signed a Comprehensive Economic and Trade Agreement (CETA) on 24 July 2025.
This is a landmark trade agreement, advancing a new era of economic partnership and opportunity.
Alongside this, India and the UK have also agreed on the text of a reciprocal Double Contributions Convention (DCC) to promote co-operation in the field of social welfare.
A DCC is a type of Social Security Agreement (SSA) which coordinates payment of social security contributions. A DCC does not cover access to social security benefits like the State Pension and does not change any rules on access to benefits.
According to this, it has been agreed between India and the UK (the Parties) that
- The DCC shall provide only the coordination of the liability to pay social security contributions.
- The DCC will provide that employees moving between the UK and India (detached workers), and their employers, will only be liable to pay social security contributions in one country (i.e. home country) at a time, if the anticipated period of employment does not exceed 36 months.
- If the anticipated period of employment subsequently increases up to or beyond 36 months, the employee shall continue to pay social security contributions solely in the home country for a maximum total period of 36 months.
- The DCC will not apply if the individual sent by their employer to work in the host country was intending to stay for more than 36 months. In that case, they would not be considered a 'detached worker' and would have to pay social security contributions in the host country like everyone else from the start of their work in that country.
- For the purposes of this DCC:
- Where an Indian detached worker is sent by an India-based employer to work temporarily in the UK for up to 36 months, they and their employer shall pay contributions into India's social security scheme (i.e. the India Employees' Provident Funds Scheme) prescribed under the social security legislation of India. Indian detached workers will not build entitlement to the UK State Pension or other contributory benefits during this period.
- Where a UK detached worker is sent by a UK-based employer to work temporarily in India for up to 36 months, they shall pay primary Class I National Insurance Contribution (NIC) and their employer shall pay secondary Class I NIC, as prescribed in the Social Security Contributions and Benefits Act 1992 of the United Kingdom. The employees will continue building entitlement to a UK State Pension during this period.
- The DCC shall also include an obligation on both the countries to implement the electronic exchange of information relating to individuals issued with Certificates of Coverage under the DCC within 36 months of this agreement entering into force.
- The DCC to be concluded shall enter into force at the same time as the CETA.
Benefits of DCC
- The DCC comes as a big relief to the multinational organizations who have employees going to work from India to the UK and vice-versa. It will support business financially and administratively by preventing double contributions for a period of 36 months.
- It will prevent the fragmentation of such employees' social security record.
- It will also help in improving the cost competitiveness and increased take-home salaries of such employees.
Please note that the agreement is not yet in force. Both the
UK and India are required to complete their respective domestic
procedures for the agreement to come into effect. Both the
countries will be able to capitalize on the benefits of the
agreement once it is ratified.
It is anticipated that it will take about a year to complete these
procedures and create administrative mechanisms to make the DCC
operational. Therefore, it may come into effect by the middle of
2026.
Our Comments
A key innovation in the agreement is the DCC. This exempts Indian workers and their employers from paying UK social security contributions for up to three years when on temporary assignments. Around 75,000 workers and over 900 companies are expected to benefit, resulting in savings of more than INR 40 billion.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
