New Delhi/London: Barely hours after Indian Prime Minister Narendra Modi and his UK counterpart Sir Keir Starmer announced a free trade agreement between the two countries, British politicians have latched on to certain clauses and claimed that the deal would hurt British workers.
Under the agreement, Indian migrants have been exempted of paying National Insurance for three years. The change was a key demand made by Indian negotiators who said the move would result in “significant financial gains” for Indian companies following talks that have finally concluded after more than three years.
India said it would create new job opportunities for its citizens in Britain and benefit those already living here. The deal will also benefit Britons working in India, who will be exempt from National Insurance.
Robert Jenrick, the shadow justice secretary, has, however, raised a red flag. In a post on ‘X’ he said: “This trade deal means Indian workers here for less than three years will not pay National Insurance in the UK. Starmer has hiked National Insurance on Brits while giving an exemption to Indian migrants. British workers come last in Starmer’s Britain.”
The deal comes after Rachel Reeves, the Chancellor, increased National Insurance for British workers and companies to plug holes in the public finances.
In a statement, the Indian government hailed the change, saying: “The 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 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 large number of Indians working in the UK.”
Nick Timothy, the Conservative MP for West Suffolk, has posted: “These changes will create a massive incentive for UK firms to work with Indian service providers, undercutting domestic workers, companies and contractors. The Convention puts India in the same column as the EU, US, Canada, and New Zealand, which have deep and extensive connections with our labour market, smaller populations and comparable salaries and living standards. And yet the economic benefit will just be 0.1% additional GDP growth for us. In other words no meaningful per capita gain at all. Yet again the benefit of the immigration will go to the immigrant and the cost will fall to the British public.”
Among those who have hailed the agreement are car manufacturers. At the moment, British car exports to India can face tariffs of more than 100% but these will be cut to just 10% in future – albeit within a set quota.
“While the agreement will likely feature compromises, and might not offer unfettered market access to all UK automotive goods, we appreciate the considerable effort British negotiators have devoted to secure the first partial liberalisation of the Indian automotive market. We trust the deal will be fair and deliver on essential UK industry priorities, with major tariff reductions on most UK automotive exports, favourable origin requirements and a workable agreement on future bilateral trade of electrified vehicles,” Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said.
