The long-anticipated India-UK trade deal is making headlines—not just for its impact on tariffs and exports but also for the real financial relief it promises to Indian professionals working abroad. One of the key outcomes is a proposed exemption from UK National Insurance contributions, which could help save Indian workers thousands of pounds annually while simplifying cross-border employment for global companies.

A Game-Changer for Temporary Indian Professionals in the UK

A big change is coming for Indian professionals heading to the UK on short-term work assignments. Under the newly signed trade agreement between the two nations, workers sent overseas by their companies may no longer have to contribute to National Insurance in the UK. This update could ease the cost of living for many and remove some of the financial red tape businesses often face with international transfers.

This measure reflects the strengthening economic ties between India and the UK while addressing the real financial concerns of global mobility.

Who Will Be Exempt from National Insurance?

The exemption forms part of a Double Contributions Convention (DCC) negotiated alongside the FTA. It allows Indian nationals seconded to the UK by companies that operate in both countries to be exempt from UK National Insurance contributions for up to three years.

British employees temporarily posted to India will get the same benefit, keeping the arrangement fair for both sides.

It’s important to understand that not every Indian professional working in the UK will be eligible for this exemption. As clarified by Full Fact, this provision does not apply to Indian nationals employed solely by UK-based companies. Only those on temporary assignments via multinational firms with cross-border operations are covered.

How Much Can Indian Workers Save?

Under current UK rules for the 2025–2026 tax year (source):

  • Employees pay 8% on weekly earnings between £242 and £967
  • An additional 2% is charged on income above £967 per week

For a worker earning £50,000 annually, this exemption could result in savings of over £4,000 per year.

This exemption improves competitiveness and increases net income for Indian service providers, particularly in tech, finance, and consulting, making UK placements more attractive.

India’s technology association, NASSCOM, called the DCC a “big win” that will boost investment appeal and enhance India’s global services footprint.

Addressing Criticism and Clarifications

Some UK business leaders and political opponents have raised concerns, suggesting the exemption could “undercut British workers” by reducing the cost of employing Indian staff, especially since UK employer contributions have recently increased.

However, UK Business Secretary Jonathan Reynolds defended the move in an interview with the BBC, stating that the UK already has similar arrangements with over 50 countries, including the US, Japan, and Gulf nations. He emphasized that the goal is to avoid double social security contributions, not eliminate obligations.

The policy includes essential safeguards:

  • Workers will still pay the NHS immigration health surcharge — currently £1,035/year for most standard work visa holders.
  • Most secondees will hold visas with a “no recourse to public funds” clause, meaning they can’t claim public benefits like tax credits or housing support.

What Employers and Workers Need to Know

To benefit from the exemption:

  • Workers must be seconded by a company with offices in India and the UK.
  • They’ll need to obtain a Certificate of Coverage from India’s Employees’ Provident Fund Organisation (EPFO)
  • UK employers must document the temporary nature of the assignment.

This policy will benefit Indian IT and consulting firms, facilitating smoother global project deployments and lowering staffing costs.

A Strategic Win for Bilateral Relations

This policy, in addition to workers’ savings, demonstrates the growing maturity of India-UK economic ties. The wider trade deal includes tariff reductions on industries like cars, clothing, and Scotch whisky and aims to boost bilateral trade by £25.5 billion by 2040.

However, the NI exemption stands out as a people-centric policy—a reflection of the fact that Indian professionals form the backbone of the UK workforce and deserve fair treatment without burdensome, duplicate costs.

Final Thoughts

The India-UK trade deal goes beyond goods and services—it reduces barriers for skilled professionals powering both economies. The NI exemption will enable Indian nationals working in the UK to retain more income, simplify legal compliance, and ease transitions between international job postings.

With the agreement nearing ratification, UK and Indian companies should begin preparing to leverage this opportunity, ensuring all processes are transparent, compliant, and worker-friendly.

Frequently Asked Questions (FAQs)

What is the National Insurance exemption in the India-UK trade deal?

The exemption allows Indian professionals temporarily seconded to the UK by multinational companies to avoid paying UK National Insurance contributions for up to three years, provided they meet eligibility criteria.

Who qualifies for the UK National Insurance exemption?

Only workers temporarily transferred by companies with offices in India and the UK qualify. Those employed solely by UK-based firms are not eligible.

How much can Indian workers save under this exemption?

A worker earning £50,000 per year could save over £4,000 annually, based on UK National Insurance rates of 8% for earnings between £242 and £967/week, and 2% on income above that.

Do Indian workers still pay the NHS health surcharge?

Yes, workers must still pay the NHS immigration health surcharge, which is currently £1,035 per year for most standard work visa holders.

What documents are required to claim the exemption?

Employees need a Certificate of Coverage issued by India’s EPFO, and their UK employer must prove the temporary nature of the assignment.

Will this impact British workers?

The UK government argues it won’t, as similar agreements exist with over 50 countries. The goal is to avoid double taxation, not reduce total obligations.

Author

  • Mike Bartley

    Mike started in software testing in 1988 after completing a PhD in Math, moving to semiconductor Design Verification (DV) in 1994, verifying designs (on Silicon and FPGA) going into commercial and safety-related sectors such as mobile phones, automotive, comms, cloud/data servers, and Artificial Intelligence. Mike built and managed state-of-the-art DV teams inside several companies, specialising in CPU verification. Mike founded and grew a DV services company to 450+ engineers globally, successfully delivering services and solutions to over 50+ clients . The company was acquired by Tessolve Semiconductors in 2020 and Mike worked at Tessolve as SVP. Mike started Alpinum in April 2025 to deliver a range of start-of-the art industry solutions:

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