Prime Minister secures thousands of British jobs and £6 billion in investment and export wins as historic trade deal with India signed
|
Thousands of jobs created for Brits through new Indian investment
and export wins worth almost £6 billion New figures show that
£4.8bn trade deal will unlock economic growth for each region and
nation of the UK – delivering on the government's Plan for Change
UK and India also agree to ramp up joint efforts against organised
crime and illegal migration with new framework to tackle
trafficking, document fraud and remove barriers to return Today,
the Prime...Request free trial
Today, the Prime Minister will welcome nearly £6 billion in new investment and export wins, which will create over 2,200 British jobs across the country as Indian firms expand their operations in the UK and British companies secure new business opportunities in India. These deals will drive jobs in high-growth sectors like aerospace, technology and advanced manufacturing – supporting engineers, technicians and supply chain workers, in every corner of the UK. It comes as the Prime Minister is set to meet the Prime Minister of India, Narendra Modi, today for the signing of the landmark UK-India trade deal. From Coventry to Carlisle, new analysis shows communities across every region of the UK will benefit from its £4.8 billion increase to UK GDP each year. Thanks to the deal, British workers will enjoy a collective uplift in wages of £2.2 billion each year and could also see cheaper prices and more choice on clothes, shoes, and food products. The UK already imports £11 billion in goods from India, but liberalised tariffs on Indian goods will make it easier and cheaper to buy their best products. For businesses, this could mean potential savings when importing components and materials used in areas such as advanced manufacturing or luxury and consumer goods. Prime Minister Keir Starmer said: “Our landmark trade deal with India is a major win for Britian. It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country, delivering on our Plan for Change.” “We're putting more money in the pockets of hardworking Brits and helping families with the cost of living, and we're determined to go further and faster to grow the economy and raise living standards across the UK.” India's average tariff on UK products will drop from 15% to 3% which means British companies selling products to India from soft drinks and cosmetics to cars and medical devices will find it easier to sell to the Indian market. Whisky producers will benefit from tariffs slashed in half, reduced immediately from 150% to 75% and then dropped even further to 40% over the next ten years - giving the UK an advantage over international competitors in reaching the Indian market. Business and Trade Secretary Jonathan Reynolds said: “The billions brought to our economy from the trade deal signed today will reach all regions and nations of the UK so working people in every community can feel the benefits. “The almost £6 billion in new investment and export wins announced today will deliver thousands of jobs and shows the strength of our partnership with India as we ensure the UK is the best place in the world to invest and do business. “This government is proving time and again that we can deliver on our mission to grow the economy, put more money in pockets and boost living standards under our Plan for Change.” The two Prime Ministers have also signed a renewed Comprehensive and Strategic Partnership, which will see closer collaboration on defence, education, climate, technology and innovation. This comes exactly one year since the countries signed the landmark UK-India Technology Security Initiative, which sees joint work on telecoms security and unlocking investment across emerging technologies – telecoms, critical minerals, AI, quantum, health/bio tech, advanced materials and semiconductors. The UK and India have also agreed to strengthen cooperation in tackling corruption, serious fraud, organised crime, and irregular migration through enhanced intelligence sharing and operational collaboration. This includes committing to finalising a groundbreaking new criminal records sharing agreement, facilitating the exchange of criminal records to support criminal proceedings, maintain accurate watchlists and enable the enforcement of travel bans. These measures represent a significant step forward in joint efforts to combat organised immigration crime. Aligned with the UK's recent Industrial and Trade Strategies, the deal will support the sectors which drive the most growth for the economy. The UK's large and varied manufacturing sectors will benefit from tariffs cut on aerospace (as high as 11% reduced to 0%), automotives (up to 110% down to 10% under a quota) and electrical machinery (from up to 22% down to either 0% of a 50% reduction). A reduction in tariffs, combined with a reduction in regulatory barriers to trade between the UK and India are estimated to:
The clean energy industry will have brand new, unprecedented access to India's vast procurement market as the country makes the switch to renewable energy and continues to see growing energy demand. For financial and professional business services, locked in access will offer certainty to expand in India's growing market and measures such as binding India's foreign investment cap for the insurance sector, ensuring UK financial services companies are treated on an equal footing with domestic suppliers. Meanwhile, 26 British companies have secured new business in India. Airbus & Rolls-Royce will soon begin delivering Airbus aircraft – with over half powered by Rolls-Royce engines – to major Indian airlines as part of around £5 billion worth of contracts recently agreed. These orders will help sustain hundreds of jobs across their respective sites in Filton, Broughton and Derby. 18 firms have confirmed new investment including Zerowatt Energy, AI powered energy intelligence platform is setting up its Global HQ in Leicester. The firm will invest £10m and create 50 new jobs across Leicester, Manchester, Edinburgh and London over the next three years. Other UK and Indian businesses who have confirmed almost £6 billion in new investments and export deals today creating over 2,200 jobs across the UK includes:
Tufan Erginbiligic, Rolls-Royce CEO, said: “India is an important market for our business, with over 90 years of partnership with Indian industry and the Indian Government. We welcome the provisions in this Free Trade Agreement, including those that bring closer alignment with international standards for trade in civil aerospace. These agreements will benefit Rolls-Royce and our customers, paving the way for future aerospace growth in India.” Nik Jhangiani, Interim Chief Executive, Diageo, said: “This agreement marks a great moment for both Scotch and Scotland, and we'll be raising a glass of Johnnie Walker to all those who have worked so hard to get it secured.” William Bain, Head of Trade Policy at the BCC, said: "The signing of this agreement is a clear signal of the UK's continuing commitment to free and fair trade. It will open a new era for our businesses and boost investment between two of the world's largest economies. “Currently around 16,000 UK companies are trading goods with Indian companies, and there is high interest in our Chamber Network to grow that. This deal will create new opportunities in the transport, travel, creative and business support sectors alongside traditional strengths in finance and professional services.” Jean-Etienne Gourgues, Chivas Brothers Chairman and CEO, said: “Signature of the UK-India FTA is a sign of hope in challenging times for the spirits industry. India is the world's biggest whisky market by volume and greater access will be an eventual game changer for the export of our Scotch whisky brands, such as Chivas Regal and Ballantine's. “The deal will support long term investment and jobs in our distilleries in Speyside and our bottling plant at Kilmalid and help deliver growth in both Scotland and India over the next decade. Let's hope that both governments will move quickly to ratification so business can get to work implementing the deal!” Notes to editors:
The remaining trade and investment wins included in the aggregate figures includes:
ANNEXE: UK-India Double Contributions Convention (DCC) – Explainer
Summary Alongside the UK-India Comprehensive and Economic Trade Agreement (CETA), the UK and India have agreed to negotiate a reciprocal Double Contributions Convention (DCC). The DCC will support business and trade by ensuring 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. The DCC will also ensure that employees temporarily working in the other country will continue paying social security contributions in their home country, preventing the fragmentation of their social security record.
A DCC is a type of Social Security Agreement (SSA) which coordinates payment of social security contributions. A DCC does not cover access to social security benefits like the State Pension and does not change any rules on access to benefits. DCCs include a provision which allows employees (known as “detached workers”) to continue paying solely into their home social security scheme when they are temporarily working abroad for an agreed maximum period. These types of arrangement are not new to either the UK or India and are used increasingly all over the world[1], informed by the International Labour Organization (ILO) model agreement[2]. The UK already has similar agreements in place covering Chile, Japan, South Korea, the 27 EU member states, Iceland, Liechtenstein, Norway, Switzerland, Barbados, Canada, Israel, Jamaica, Mauritius, Philippines, Bosnia-Herzegovina, North Macedonia, Serbia, Montenegro, Kosovo, Turkey, and the USA. India has nineteen similar agreements in place with Argentina, Belgium, Germany, Switzerland, France, Norway, Canada, Australia, Japan, Austria, Luxembourg, Denmark, South Korea, Netherlands, Hungary, Czechia, Finland, Sweden and Portugal. They also have a “contributions-only” arrangement with Singapore. Where the UK does not have a DCC or SSA in place with a country, National Insurance rules exempt employees sent by their employer to work temporarily in the UK from paying National Insurance Contributions (NICs) for the first 52 weeks of their stay. Employers also benefit from this 52-week exemption period. This helps reduce administrative burdens for inbound workers and helps them maintain a full contribution record at home if they can maintain their payments there. The UK only extends the 52-week exemptions through SSAs and DCCs because these ensure reciprocity, meaning UK workers will also benefit from an extended exemption period in the other country.
The UK and India have agreed to negotiate a DCC so that it comes into force alongside the CETA. Once the DCC is in force, the UK and India have agreed that there will be no “double contributions”, and the 52-week exemption period will be extended reciprocally to 36 months for detached workers. This means UK detached workers sent to India to work temporarily for up to 36 months will continue building entitlement to a UK State Pension as they continue to pay NICs during that period. The same principle applies to Indian detached workers sent by India-based employers to work temporarily in the UK for up to 36 months. Whilst working in the UK the amounts of contributions paid by Indian detached workers back into India's social security scheme (the India Employees' Provident Funds Scheme) will be similar to the amount they would have paid in UK NICs. Under this agreement, Indian detached workers will not build entitlement to the UK State Pension or other contributory benefits. If a detached worker's family member takes up employment in the UK, they must pay UK NICs.
Social security contributions are normally paid in the country where the work is carried out. This means that workers moving between the UK and India to take up employment will pay social security contributions in the country where they work. If someone living in India decides to move to the UK and secures a job, then they will pay UK NICs in the same way as everyone else from the start of their work in the UK. The NICs exemption only applies to individuals who are living in India and who are already working for an India-based employer. If their employer decides to send them to the UK for up to a maximum of 36 months temporarily, they will be considered detached workers and would not pay any contributions in the UK. They would instead pay a similar amount in social security contributions back into India's social security scheme. The NICs exemption would not apply if the individual sent by their employer to work in the UK was intending to stay for more than 36 months. In that case, they would not be considered ‘detached workers' and so would pay UK NICs like everyone else from the start of their work in the UK.
The approach taken by successive Governments has been to support the principle of preventing double payments of social security contributions and prevent, so far as possible, the fragmentation of workers' social security records. When agreeing to negotiate a DCC with India, the Government took account of the benefits of the wider trade deal, which will add £4.8 billion to UK GDP every year and boost UK wages by £2.2 billion every year in the long run. The indicative results of DBT analysis also suggest that the trade deal could increase public sector receipts by £1.8 billion annually in the long run. The net impact on the Exchequer and the British economy of this deal is a significantly positive one. The Office for Budget Responsibility will certify the impact of the CETA, including the DCC, in the usual way at a fiscal event, once the deal is finalised and ratified. The cost of the DCC agreement is likely to be a fraction of the overall deal's economic benefit.
The DCC will not make it cheaper to hire Indian workers over British workers and nothing in the agreement will change our immigration regime or affect the UK's right or ability to control our borders. The DCC is not expected to have a long-term impact on net migration. Indian detached workers will continue to pay back into India's social security scheme on a similar basis whilst they are not paying NICs, and they will need to meet several requirements before getting a visa. This can include sponsorship from a business in the UK or a contract to supply a service with a UK-based company. Specific salary thresholds will also need to be satisfied, for example, for the Senior or Specialist Worker Visa, a worker must be paid at least £48,500 or the ‘going rate' for that job – whichever is higher. These salary requirements ensure the worker's pay is commensurate with that of British workers and limits the degree to which their pay could undercut the British work force. Workers and employers would also have to cover all of the costs of moving to the UK. For example, Indian workers coming to the UK as a senior or specialist would have to pay a visa application fee of £769, and an Immigration Health Surcharge (IHS) of £1,035 for any stay exceeding six months and up to 12 months, and a further £1,035 for each additional year. If the worker's stay exceeds six months, employers would also need to pay the Immigration Skills Charge of £1,000 for the first year, and a further £500 for each additional six-month period. Employers must also pay £525 to issue a Certificate of Sponsorship. These are all measures designed to regulate the entry of foreign workers. If Indian workers and their employers cannot meet these requirements they will not be given a visa, and they cannot benefit from the DCC. [1] International social security agreements in Asia-Pacific | International Social Security Association (ISSA) (figure 2). [1] Recommendation R167 - Maintenance of Social Security Rights Recommendation, 1983 (No. 167)
|