The 11th India-UK Economic and Financial Dialogue (EFD) between Finance Minister Nirmala Sitharaman and British Chancellor Rishi Sunak, which took place via videoconference on Thursday, concluded in a joint statement covering a wide range of areas from cooperation on climate change to financial services investment boost.
The statement also raised a commitment to hold discussions on the payment of social security or pension contributions for Indian professionals who are only temporarily in the UK.
“The UK and India have committed to a joint dialogue, including the involvement of relevant stakeholders, for mutual exchanges and information sharing on the possibility of signing a social security agreement. The first meeting was held on 26 August 2021,” it said. the joint statement.
The Federation of Indian Chambers of Commerce and Industry (FICCI), which has been campaigning on the issue for years, said her long-term concern is finally being addressed.
The compulsory National Insurance (NI) contributions of skilled Indian professionals in the UK on temporary visas will continue to be an additional cost burden of approximately GBP 500 per employee per year, on top of all other taxes and health benefits paid to the National Health Service (NHS).
“We are delighted that the two countries are now committed to working towards a social security deal signing opportunity. This has long been a concern of FICCI members as contributions from Indian professionals and companies are between GBP 413 and GBP 522 per year,” said Baroness Usha Prashar, chair of the FICCI UK Council.
The history of this matter dates back to 2007, which resulted in a formal letter to the Indian High Commission in London in December 2010, which appeared to have closed the door on the matter from the British side.
However, with Indian workers’ contributions estimated to be between £400m and £600m a year, it has been lobbied and cited the UK-US social security agreement as a good model to pursue.
It now appears that there is some movement towards finding a long-term solution.
The India-UK EFD marked the signing of a $1.2 billion package of public and private investments 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 mobilizing private capital for sustainable infrastructure in India, including clean energy such as wind and solar and other green technologies.
“The announcements in the joint statement are encouraging and FICCI welcomes the ambitious partnership based on our shared vision of economic growth, sustainability and investment,” said Prashar.
“We are encouraged that the two ministers have welcomed the work of the UK-India Sustainable Finance Working Group, which is led by FICCI and the City of London Corporation. The group is committed to scaling up cash flows to meet India’s sustainable development goals provides advice and recommendations to green the financial system, including appropriate disclosures and taxonomy,” she added.
The EFD is held annually between India and the UK and the next one is scheduled to take place in London in 2022. This week’s interaction between senior cabinet ministers focused on advancing the bilateral agenda of an Enhanced Trade Partnership (ETP), just as the UK public consultation on the scope of trade talks with India concluded on 31 August.
Both sides have agreed to work in the future on a Free Trade Agreement (FTA) with the primary goal of doubling India-UK bilateral trade by 2030.