In a move set to cheer India’s IT giants and thousands of overseas professionals, India and the United Kingdom have signed a long-awaited agreement to end double social security contributions for employees on short-term assignments.
The pact, inked on Tuesday, aims to prevent workers from paying into social security systems in both countries simultaneously when they are deputed abroad for up to three years, reported PTI.
For companies such as Tata Consultancy Services (TCS) and Infosys, which routinely send employees to the UK for client projects, the development could translate into meaningful cost efficiencies and smoother talent mobility.
What Has Been Signed?
The agreement was signed by Foreign Secretary Vikram Misri and British High Commissioner Lindy Cameron. According to the Ministry of External Affairs (MEA), the arrangement is designed to eliminate double social security payments for employees temporarily assigned to each other’s territory for periods of up to 36 months.
In practical terms, this means that an Indian employee sent to the UK on a short-term assignment will not be required to contribute to the British social security system if they are already contributing to India’s system and vice versa.
The MEA said the agreement will support employee mobility and ensure continued social security coverage for professionals on temporary overseas postings.
Why This Matters for India’s IT Sector
India’s technology and services companies have long sought relief from overlapping social security obligations in key global markets. The UK is one of the most important overseas destinations for Indian IT professionals, with firms maintaining a significant on-site presence for client servicing.
Under the previous framework, companies often had to make social security contributions in the host country even if employees were contributing at home. This added to operational costs and complicated workforce planning.
With the new pact in place, IT majors like TCS and Infosys, both of which have a sizeable footprint in the UK, are expected to benefit directly. For up to three years, they will not need to make additional social security payments in the UK for employees deputed from India to support business operations.
The impact could extend beyond just large corporations. The agreement is likely to benefit around 75,000 Indian workers, easing financial burdens and improving clarity around benefits coverage during overseas assignments.
Boost to Services and Bilateral Trade
The MEA noted that the agreement will strengthen India-UK collaboration in the services sector by leveraging the high skills and innovation capacity of both countries.
This development forms part of the broader India-UK Comprehensive Economic and Trade Agreement (CETA). When CETA was signed in July last year, both sides had committed to concluding a social security arrangement.
The newly signed pact will come into effect alongside CETA, which is planned for implementation during the first half of the current year.
The social security agreement is expected to complement the wider trade framework by reducing friction in cross-border movement of skilled professionals, a critical component of modern trade relationships centred around services, consulting, technology and finance.
What Happens Next?
According to the MEA, the agreement will be made available on the official website of the Ministry of External Affairs as well as on the website of the Employees’ Provident Fund Organisation (EPFO).
This will enable eligible employees and companies to obtain Certificates of Coverage, a document that confirms they are contributing to their home country’s social security system and are therefore exempt from parallel contributions abroad.
For employees, the change means greater financial predictability and continued social security benefits without duplication. For employers, it simplifies compliance and reduces assignment-related costs.
