Workforce of Indian IT firms outside the country will get a boost owing to the three-year exemption from social security contributions announced alongside the India-UK Free Trade Agreement (FTA).
Atul Soneja, Chief Operating Officer, Tech Mahindra, one of India’s major tech firms, said that the exemption for Indian workers in the UK, as outlined in the Double Contribution Convention, will have substantial implications for the company and others like it.
“In the short term, this could reduce operational costs and allow for greater flexibility in talent deployment. In the long term, easing these contributions could motivate Indian IT firms to increase their workforce in the UK, strengthening partnerships and promoting innovation within the sector,” he said.
Keshav Murugesh, CEO of WNS Global too said “I’m particularly excited that this deal will enable the UK to fully recognise India as a key destination for its students and talent to achieve their ambitions in AI-skill space. For students and technology professionals, this FTA should serve as a springboard for deeper collaboration in DeepTech and the mobility of skills. The long-term potential of this partnership is immense.”
Sindhu Gangadharan, MD of SAP Labs India and Chairperson of NASSCOM, too said that the FTA and social security exemption offer immense opportunity and new market access to India’s IT and services sector, especially the start-ups and SME ecosystem. Another digital talent solutions provider, that wished to remain anonymous, also told businessline that the announcement was likely to boost hiring by IT firms outside of India.
Lower cost of living
According to Manish Mishra, Partner & Head - Indirect Tax, JSA Advocates & Solicitors the Double Contribution Convention relaxes visa norms, the Double Contribution Convention relaxes visa norms, as well as cost-savings for Indian service providers in UK, thereby strengthening their market position in UK.
“The FTA is going to bring in significant benefits and incremental demand for India. The visa relaxations will encourage people to move from India to the UK. So, increase in hiring in UK by firms is likely,” he said.
Even DD Mishra, VP Analyst at Gartner, said the Double Contribution Convention will ease the migration of Indian IT professionals across borders, encouraging collaborations in technologies like artificial intelligence and cybersecurity.
Big win for temporary employees
Despite the focus on the IT sector, Russell A Stamets, Partner at Circle of Counsels, warned that the countries have only shared the bare outlines of the agreement so far and haven’t categorically given exemptions only to the IT sector. Officials also need to clarify whether the exemptions will apply to all the temporary employees already in the UK or those who will be in the country.
“What about the people deployed today temporarily to the UK? Do they get benefit of this? The [India] government should fight for that. There’s no harm in it. These people should be included,” he said.
Overall, he described the news as a net positive for Indian individuals and companies functioning in the UK by putting more money in Indian pockets.