NEW DELHI: Indian professionals working with their company's affiliates in the UK or on an onsite assignment will be exempted from social security contributions for five years, instead of three years agreed earlier, on producing a certificate that they are contributing to the Employees' Provident Fund Organisation (EPFO) in India.
Benefits for Indian Workers
The move will reduce an outgo of 15% and cover 90-95% of Indian workers in the UK, whose number is estimated at over 75,000 at present. The new social security agreement, or the Double Convention Agreement (DCC), will be implemented from July 15, along with the Comprehensive Economic and Trade Agreement (CETA), where the government has managed to get concessions for a large chunk of steel exports under new tariffs.
Steel Export Concessions
While Indian steel exports to the UK were to the tune of $890 million, 188 products with shipments valued at $137 million were affected, but market access for these products has been secured through a mix of measures, such as country-specific and residual quotas under the bilateral trade pact, an official said. Around 85% of India's steel exports to the UK have been exempted from Britain's upcoming steel safeguard rules.
Trade Pact Rollout
The UK's steel safeguard measures, which apply to all countries, were a key stumbling block in the rollout of the trade pact signed last year. On Wednesday, the deal was sealed and announced after a meeting between Prime Minister Narendra Modi and his UK counterpart Keir Starmer. The UK duties will cut duty-free steel import quotas by 60% from July 1, with imports above the prescribed limits subject to a 50% tariff from 25% at present. The details of the India-UK steel deal will be announced on July 1.
Financial Impact
The DCC is expected to help save at least Rs 4,000 crore annually for Indian workers, while helping improve their competitiveness compared with countries that already have similar agreements with the UK.
