India UK Trade Deal: What It Means for Hiring in India and the UK
The India UK trade deal is now live, and it came with a social security agreement that changes the cost of moving staff. So HR teams on both sides need to know what actually changed. This guide explains the new rules in plain terms, and what they mean when you hire in India or send people to the UK.
Key takeaways
- The India UK trade deal, known as CETA, entered into force on 15 July 2026.
- A social security agreement started on the same day, so staff on temporary UK assignments avoid double contributions.
- That exemption covers postings of up to five years.
- About 75,000 Indian professionals and more than 900 Indian companies work in the UK, and most are expected to benefit.
- Employment law did not change, so hiring in India still needs an entity or an Employer of Record.
What did the India UK trade deal actually change?
The Comprehensive Economic and Trade Agreement, or CETA, entered into force on 15 July 2026. Alongside it, India and the UK brought in an Agreement on Social Security, also called the Double Contribution Convention.
The social security piece matters most for employers. Under it, Indian professionals on temporary UK assignments, and their employers, are exempt from UK social security contributions. They keep contributing in India instead. The exemption covers postings of up to five years.
About 75,000 Indian professionals and more than 900 Indian companies currently work in the UK, and officials expect most of them to benefit. You can read official updates on the Ministry of Commerce and Industry site.
What does the India UK trade deal mean for UK companies hiring in India?
Trade deals usually lift services trade first, because services need no shipping. So expect more UK firms to open India teams for engineering, analytics, finance and support work.
However, the trade deal changes nothing about employing people in India. Indian law still applies in full:
- You need a local entity to run payroll yourself, or an Employer of Record to act as the legal employer.
- Every new employee needs an appointment letter under the Labour Codes.
- Employer Provident Fund is 12% of basic wages, and gratuity accrues at about 4.81% of basic pay.
- Notice periods of one to three months still shape your hiring timeline.
Our breakdown of the cost of hiring in India sets out the full budget, while our guide to employment contracts in India covers the paperwork.
What does it mean for Indian companies sending staff to the UK?
This is where the saving sits. Before, an Indian employee posted to the UK could end up paying into two systems at once. Now, for postings of up to five years, the UK contributions fall away while Indian contributions continue.
In practice, you will usually need a certificate of coverage from the EPFO to prove the employee remains covered in India. Build that step into your assignment checklist, and start it early. Details sit on the EPFO website.
One caution: a social security exemption is not a work permit. Your staff still need the right UK immigration status, so treat those as separate workstreams.
Which route fits your plan?
| Your plan | Usual route | Key point |
|---|---|---|
| UK firm hiring its first few people in India | Employer of Record | Live in weeks, with no Indian entity needed |
| UK firm building a large India team | Own Indian entity | Months to set up, but better for scale and local contracts |
| Indian firm posting staff to the UK short term | Assignment under the social security agreement | Get the certificate of coverage before travel |
| Indian firm hiring locally in the UK | UK entity or a UK-based EOR | UK employment law applies to those staff |
What stays the same after the India UK trade deal?
Quite a lot, and that is the part people miss.
- Employment law is unchanged. India keeps its Labour Codes, and the UK keeps its own rules.
- Tax is separate. Social security and income tax are different systems, so check both.
- Immigration is separate. Visas follow their own rules and timelines.
- Permanent establishment questions remain. People working in another country can create tax presence, so take advice.
India is building similar arrangements elsewhere too. Our note on the India EU social security roadmap covers what may come next in Europe.
Frequently asked questions
When did the India UK trade deal come into force?
The India UK Comprehensive Economic and Trade Agreement, or CETA, entered into force on 15 July 2026. The Agreement on Social Security between the two countries, often called the Double Contribution Convention, started on the same date.
Does the India UK trade deal remove double social security payments?
Yes, for temporary assignments. Indian professionals posted to the UK, and their employers, are exempt from UK social security contributions for up to five years, provided they keep contributing in India. A certificate of coverage from the EPFO is needed to claim the exemption.
Does the India UK trade deal let a UK company hire in India without an entity?
No. The trade deal does not change Indian employment law. A UK company still needs either its own Indian entity or an Employer of Record to employ people in India. The EOR route is faster, because the EOR is already registered for payroll, Provident Fund and tax.
Do employees still need a UK visa under the agreement?
Yes. The social security agreement only covers contributions. It is not a work permit and it does not grant immigration rights, so employees still need the correct UK visa or status before they travel.
How TMS can help
TMS’s Employer of Record service lets UK companies hire employees in India from day one, without setting up a local entity. We act as the legal employer and handle contracts, payroll, Provident Fund and statutory compliance under Indian law.