UK-India Trade Deal – Effects on Immigration?

Following three years of negotiations, the UK Government announced on 6 May 2025 that the UK and India have approved a trade agreement between the two countries. The UK Prime Minister, Keir Starmer, proclaims this to be the UK’s biggest trade agreement since we left the EU. 

But what does this have to do with UK immigration?

Double Contribution Convention

Amongst its many promises to reduce levies on trade imports and exports, the deal also vows in implementing a reciprocal Double Contribution Convention (DCC) between the countries. This means that “employees moving between the UK and India, and their employers, will only be liable to pay social security contributions in one country at a time”. 

Additionally, the DDC will also make a National Insurance exemptions for Indian nationals who are temporarily working in the UK for up to 3 years, and vice versa. This will mean that Indian nationals temporarily working in the UK will only pay social security contributions in India, not in the UK. The UK-India DDC will function similarly to the agreements in place with, for example, Japan and Switzerland. DDC agreements are designed to ensure that employees do not make social security contributions in two countries at once.

Potential Effects on Immigration and Employment

Following its implementation, we could see an increase in Indian businesses setting up subsidiaries in the UK and applying for UK Sponsor Licences, a prerequisite to any temporary work visa for Indian nationals.

While we are uncertain of the parameters of its implementation, we will likely see it operate within the current Contractual Service Supplier immigration route. 

Jonathan Reynolds, UK’s Business Secretary, has confirmed that it will only be open for a “small number of visas from an existing route for chefs and musicians and yoga teachers”. This could open the door for more Indian chefs to work in the UK’s hospitality industry, a sector which suffered greatly post-COVID 19 but is slowly recovering. It is important to note, however, that we are unlikely to obtain further details of the agreement until it comes into effect, potentially next year. This is something we will monitor closely.

This will also have effects on employment in the UK. Shazia Shah, a partner in Irwin Mitchell’s Employment team, comments as such: 

“It’s important for employers to prioritise hiring the right candidate over any potential cost savings. If an employer hires a candidate because of their nationality, then this could give rise to discrimination claims from candidates passed over for the role because they are not Indian nationals. Also, given the upcoming Employment Rights Bill, granting employees a day one right not to be unfairly dismissed, it will become even more crucial to hire the right person as it will be tougher to let them go if they are not performing in their role.”

Knowing the relevant UK immigration laws and how to be compliant is pertinent for any new business setting up a subsidiary in the UK, including those Indian businesses who will benefit from the new DDC agreement. 

Irwin Mitchell’s Immigration and Employment teams can assist your business with this, from obtaining a sponsor licence to assisting individual employees with their visa applications. 

If you have any questions, please do not hesitate to contact Mandeep Khroud (immigration) or Shazia Shah (employment).