Good news for techies as India-UK Free Trade Agreement eases IT worker mobility

PM Narendra Modi made the FTA announcement after a telephonic conversation with his British counterpart Keir Starmer.

India and the United Kingdom’s Free Trade Agreement (FTA) bears good news for the 5.4 million Indian IT services workforce hoping to secure global roles in the English country, as trade barriers get eased out.

Called the “most ambitious FTA commitment from the UK”, the new policies will ease mobility of professionals including contractual service suppliers that would have a direct benefit on the information technology (IT) sector. India has also secured significant commitments on digitally delivered services in areas such as engineering, computer related services and telecommunication services.

Additionally, the FTA will also ease mobility of business visitors, investors, intra-corporate transferees, partners and dependent children of intra-corporate transferees with right to work, and independent professionals.

Industry experts and analysts called this a watershed moment between the countries.

Reacting to the development, software industry body National Association of Software and Service Companies (Nasscom) said this agreement is a testament to the deepening economic partnership between the two global innovation hubs and represents a significant step toward fostering trade, investment, and job creation in both nations. “This agreement will catalyse bilateral trade in services, foster cross-border innovation, and generate high-quality employment opportunities for Indian talent.”

Nasscom also said it is thankful to both the governments for the inclusion of the Double Contribution Convention, which exempts Indian workers temporarily employed in the UK and their employers from paying social security contributions for a period of three years.

“By eliminating this double contribution burden, the agreement directly addresses a long-standing challenge faced by Indian technology companies and other service providers operating in the UK,” Nasscom said, lauding the FTA.

The Ministry of Commerce and Industry shared that the Direct Contribution Convention will exempt Indian employees on temporary work visa in UK from making social security contribution for 3 years. This will help the employees save around 20 percent of their salaries. This is expected to benefit more than 60000 employees from IT sector alone, while benefits to Indian companies and employees to exceed Rs.4000 crore

Meanwhile, Europe, particularly the UK, continues to be a major market of Indian IT services companies, drawing over a quarter of their revenues from the region.

India’s IT behemoth Tata Consultancy Services (TCS) derives almost 17 percent of its overall revenue from the UK, while about 14 percent revenue originates from continental Europe.

Peers including Infosys, HCLTech, and Wipro get nearly 30 percent of their revenue from the Europe region.

According to DD Mishra, VP Analyst, Gartner, the FTA and a Double Contribution Convention between India and the United Kingdom signify a pivotal advancement in their strategic partnership, poised to catalyze transformative impacts on the IT sector and propel advancements and research in cutting-edge fields like artificial intelligence and cybersecurity.

“This enhanced accessibility is anticipated to spur substantial investments from UK entities into India's thriving IT landscape, fostering an environment ripe for growth and innovation.This ease of movement is expected to enrich the exchange of talent and expertise, driving dynamic collaboration in technology and innovation,” he said.

He added, “In addition, the FTA is anticipated to harmonize regulatory standards, effectively reducing compliance costs and complexities for IT companies operating within both jurisdictions. This regulatory alignment will streamline operations, enhancing efficiency and competitiveness.”

Rituparna Chakraborty, Co-founder of staffing solutions firm TeamLease Services believes while this FTA benefits several industries, the true game-changer lies for the tech services industry.

“The FTA opens new doors for Indian IT, fintech, edtech, and professional services firms to scale into the UK, backed by a three-year exemption on social security contributions for Indian professionals—a first-of-its-kind achievement that directly improves cost competitiveness,” Chakraborty said.

For UK businesses, this offers streamlined access to India’s vast skilled workforce across technology, finance, education, and design. “It’s not just about easing trade; it’s about enabling purposeful talent mobility and high-quality employment creation in both economies,” she added.