India and the UK’s decision to avoid double contribution to social security funds by Indian professionals working temporarily in the UK is expected to have a positive impact on Indian companies operating there, especially for IT service providers. The double contribution convention (DCC) was announced on Tuesday along with the free trade agreement (FTA) between the two countries.
The sector has about 5.4 million workers and earns more than a quarter of its income from Europe and by removing trade barriers, the agreement is set to make it easier for Indian professionals, especially those offering services on a contract basis, to move between countries. This is likely to help IT service companies directly.
The deal also covers digital services like engineering, computer-related work, and telecom services. Apart from IT professionals, the FTA will also make it easier for investors, employees transferred within companies, their partners and children with work rights, and independent professionals to travel and work.
Nasscom, the Indian IT industry group, said the agreement showed how the economic ties between the two countries are growing stronger. “This agreement will catalyse bilateral trade in services, foster cross-border innovation, and generate high-quality employment opportunities for Indian talent,” Nasscom stated.
“By eliminating this double contribution burden, the agreement directly addresses a long-standing challenge faced by Indian technology companies and other service providers operating in the UK,” it said.
On similar lines, Sindhu Gangadharan, MD, SAP Labs India, and chairperson, Nasscom, said, “The India-UK free trade agreement stands as a pivotal milestone — one that will accelerate innovation, unlock new avenues for digital trade, and deepen technology collaboration between the two nations. For India’s IT and services sector, especially our vibrant ecosystem of startups and SMEs, this agreement signals immense opportunity and access to new markets. Beyond economics, it reflects a shared vision: of a digitally empowered future and a stronger, knowledge-driven partnership rooted in trust, talent, and technology.”
The ministry of commerce and industry said that Indian employees in the UK on short-term work visas would save around 20% of their salaries because of this change. It is expected that more than 60,000 IT sector workers will benefit.
The UK continues to be an important market for Indian IT firms. Tata Consultancy Services (TCS), India’s largest software exporter, gets 16-17% of its revenue from the UK. Other large firms like Infosys, HCLTech, and Wipro earn 25-30% of their income from Europe.
DD Mishra, vice president analyst at Gartner, spoke about the wider effects of the agreement. “The completion of a free trade agreement (FTA) and a double contribution convention between India and the United Kingdom marks a significant milestone in their strategic partnership, poised to bring transformative changes to the IT sector. This FTA aims to remove trade barriers, facilitating smoother access for Indian IT companies to the UK market, while similarly enhancing opportunities for UK firms in India. This improved market access is expected to attract substantial investments from UK businesses into India’s vibrant IT industry, creating a fertile ground for growth and innovation,” he said.
Mishra also said, “DCC is set to streamline social security contribution processes, making it easier for IT professionals to move across borders. This increased mobility is anticipated to enrich the exchange of talent and expertise, fostering dynamic collaborations in technology and innovation. The partnership is likely to spark joint ventures and research initiatives, driving progress in advanced fields such as artificial intelligence and cybersecurity.”
He further highlighted the benefits of similar regulations: “Moreover, the FTA is expected to align regulatory standards, thereby reducing compliance costs and complexities for IT companies operating in both regions. This regulatory harmonization will simplify operations, boosting efficiency and competitiveness. As trade relations deepen, they are projected to stimulate economic growth, increasing the demand for advanced IT services and solutions. This strategic alliance not only highlights the commitment to shared prosperity but also paves the way for a new era of technological collaboration and economic synergy between India and the UK.”
Nasscom agreed, saying that getting the DCC included in the India-UK FTA is a key achievement and a major benefit for India’s IT sector.
With these changes in place, Indian IT companies and professionals are expected to see clear gains in cost savings, easier compliance, and better access to the UK market, strengthening the long-standing technology relationship between the two countries.