British Trade Secretary Jonathan Reynolds and India's Commerce Minister Piyush Goyal on June 18 defended the move to exempt Indian workers from national insurance contributions for up to three years in response to opposition over this step in certain quarters in the United Kingdom.
Reynolds said that given that Britain extends similar arrangements to a limited degree for every country in the world and for a great many nations for an extended period, "why would the UK refuse to offer that to India, why would we uniquely discriminate against India when the economic, personal and historical relations are strong."
Goyal said that the demand for providing insurance breaks for short-term Indian workers in the UK had been on the table for three years during negotiations for a trade deal and cannot be termed as a "give away".
"First of all it is not something we have raised after the new (UK) government came in, it has been on the table for three years of discussions and almost two or two-and-a-half years ago it had been made a non-negotiable part of our discussions to bring balance and equity to the trade deal. it is unfair to call it a give away and secondly, these are people who are adding value to the UK economy, they are not just loitering around," Goyal said in London.
As part of the trade deal agreed to by India and UK on May 6, Indian workers on short-term visas will only make social security payments in their home country for up to three years.
Opposition parties in the UK claim this could be unfair for British workers since companies may find it cheaper to hire Indian employees.
Reynolds called such claims baseless, adding that "it is not a case where if you employ a British person, you would be paying more taxes than if it was an Indian person you were recruiting. This is a business mobility provision which the UK has with every country in the world…It is reciprocal."
"No British worker is undercut by this agreement, it is completely false to say that," Reynolds said.
Goyal added, in all fairness, this provision was discussed almost three years ago that such temporary people who add value to the UK economy should not be double taxed.
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