“The UK and India committed to a joint dialogue, including relevant stakeholder participation, for mutual exchanges and sharing of information concerning the possibility of signing a Social Security Agreement. The first meeting took place on 26th August 2021.”
These lines are from the joint statement agreed at the end of 11th India-UK Economic and Financial Dialogue (EFD) between UK Chancellor Rishi Sunak and Indian Finance Minister Nirmala Sitharaman and have been widely welcomed by Indian industry as a positive step in the right direction.
It holds out the possibility of an India-UK Social Security Agreement, a long-standing demand of Indian businesses operating in Britain to cut down on the additional cost burden associated with skilled Indian professionals brought to the UK only on a short-term basis.
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The EFD, which took place virtually last week (pictured), covered a wide range of areas from climate change cooperation to financial services investment boost. Also covered in the statement was this commitment to hold talks on a potential social security pact, akin to the one the UK already has in place with the US.
The Federation of Indian Chambers of Commerce and Industry (FICCI), which has been campaigning on the issue over the years, said its long-standing concern is finally being addressed. The compulsory National Insurance (NI) contributions of skilled Indian professionals in the UK on temporary visas remains an additional cost burden of around £500 per employee a year, over and above all other taxes and health surcharge paid towards the National Health Service (NHS).
“We are pleased that the two countries are now firmly committed to working towards a possibility of signing a Social Security Agreement. This has been a long-standing concern of FICCI members, as contributions by Indian professionals and companies cost between £413 and £522 per year,” said Baroness Usha Prashar, Chairperson of the FICCI UK Council.
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The EFD is held annually between India and the UK and the next one is scheduled in London in 2022. Last week’s interaction between the senior Cabinet ministers was targeted at driving forward the bilateral agenda of an Enhanced Trade Partnership (ETP), just as the UK’s public consultation process for the scope of trade negotiations with India closed on August 31. Both sides have agreed to work towards a free trade agreement (FTA) in future with an initial goal of doubling UK-India trade by 2030.
The EFD, meanwhile, marked the signing off of a $1.2-billion package of public and private investment in green projects and renewable energy to boost India’s green growth ambitions. It also saw the launch of a new Climate Finance Leadership Initiative (CFLI) India partnership, aimed at mobilising private capital into sustainable infrastructure in India, including clean energy like wind and solar power and other green technologies.
“The announcements in the joint statement are encouraging and FICCI welcomes the ambitious cooperation based on our shared vision for economic growth, sustainability and investment,” said Baroness Prashar.
“We are encouraged that the two ministers welcomed the work of the UK-India Sustainable Finance Working Group which is led by FICCI and the City of London Corporation. The group aims to scale flows of finance to support India's sustainable development goals. The group also provides advice and recommendations to green the financial system, including appropriate disclosures and taxonomy,” she added.