DCCA Agreement Between India And The UK To Help Indian Workers Save 20 Per Cent More

Indian professionals working in the United Kingdom (UK) can now save more because of the Double Contribution Convention Agreement (DCCA) between India and the UK. Under the agreement, Indian professionals temporarily working in the UK will not need to make dual contributions for social security.

While the Free Trade Agreement (FTA) between the two countries has been under deliberation for last three years, securing DCCA came unprecedented. The social security agreement is expected to benefit not only the Indian workers but also their employers.

The Ministry of Labour and Employment posted on X (formerly Twitter): “A Landmark Benefit Under the India–UK FTA! Indian workers on temporary assignment in the UK are now exempt from social security contributions for three years. This translates to significant savings for Indian employees and their employers in the UK.”

The Ministry of Commerce and Industry said, “In an unprecedented achievement, India has secured an exemption for Indian workers who are temporarily in the UK and their employers from paying social security contributions in the UK for a period of three years under the Double Contribution Convention. This will make Indian service providers significantly more competitive in the UK.”

Until now, Indian workers in the UK posted on temporary assignments had to contribute to the British social security system mandatorily. However, due to short term assignment, they would come back from the UK and therefore could not claim the social security benefits provided in the UK.  

Social Security Benefits:

These benefits typically include pension, medical facilities, and safeguards against unemployment. 

Who Is Expected To Benefit

The Information Technology (IT) sector is projected to be the major beneficiary with around 60,000 employees to benefit. This agreement will help Indian workers on temporary assignments in the UK to save around 20 per cent of their salary, PTI reported.  

Reportedly, the benefits due to DCCA would be worth more than Rs 4,000 crore for workers and Indian companies in total.

According to the Ministry, DCCA “will lead to significant financial gains for the Indian service providers and enhance their competitiveness in the UK market that would create new job opportunities as well as benefit a large number of Indians working in the UK”.

This is not the first time that India has secured such a social security pact with another country. India already has such pacts with countries including Germany, France, Switzerland, Denmark, Belgium, the Netherlands, and South Korea.