Published by Global Banking & Finance Review®
Posted on May 7, 2025
3 min readLast updated: January 24, 2026
Add as preferred source on GoogleThe UK-India trade deal offers tax breaks for Indian workers, sparking debate over its impact on British workers. Keir Starmer defends the agreement, highlighting similar deals with other nations.
By Sachin Ravikumar and Andrew MacAskill
LONDON (Reuters) -British Prime Minister Keir Starmer on Wednesday dismissed the idea that he had sold out British workers by giving a tax break to some Indian workers as part of a free trade agreement with India, calling the claims "incoherent nonsense".
The trade deal announced on Tuesday, which includes a range of tariff cuts on British imports to India, also exempts some short-term workers from India from paying into Britain's social security system for three years.
The exemption under the so-called Double Contributions Convention (DCC) also applies to British workers in India, but while Britain barely made mention of this element of the trade deal, India hailed it as a "huge win".
British opposition parties accused the government of signing up to a deal that would unfairly benefit India.
"Our India trade deal ... is good for British jobs. The criticism on the double taxation is incoherent nonsense," Starmer told parliament. "It's in the agreements that we've already got with 50 other countries."
Britain has social security agreements with the European Union and countries including Switzerland, Canada, Japan and Chile, with some deals allowing for five-year exemptions, which ensure migrant workers are not taxed in two countries at one time. India also has similar agreements with other nations.
Britain expects the DCC agreement with India to cost around 100 million pounds ($133 million) a year.
Social security, known as National Insurance in Britain, is the country's second-biggest tax, which raises over 170 billion pounds in government revenue through employee and employer contributions.
Earlier, Britain's Trade Minister Jonathan Reynolds said that the changes would affect only a "very small number" of people.
Nigel Farage, the leader of Reform UK, which is currently leading in the opinion polls, said the government had "sold out British workers".
He said that Indian workers and firms would pay 20% less tax than their British counterparts.
Indian officials have said the social security exemptions would benefit Indian information technology companies operating in Britain, which often transfer employees to the country on short-term contracts.
Official data shows Britain granted more than 81,000 work visas to Indians last year, more than any other nationality, although many represent health and care or other non-temporary workers who would still be expected to pay social security in Britain.
($1 = 0.7492 pounds)
(Reporting by Sachin Ravikumar and Andrew MacAskill; Editing by Sharon Singleton)
The main topic is the UK-India trade deal and its implications for British and Indian workers, particularly regarding social security exemptions.
Critics argue the deal unfairly benefits Indian workers with tax breaks, potentially disadvantaging British workers.
The deal exempts some Indian workers from paying into the UK's social security system for three years, with similar provisions for British workers in India.
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