Katie Lam

The Indian Government are highly unusual in their approach to trade agreements. Unlike most other countries, India has a long-standing policy of using trade deals to try to secure favourable treatment in the immigration system. This deal, unfortunately, is no different. Under the terms of the agreement, Indian companies will be able to transfer their workers to this country far more easily and, once they are here, those workers will be able to avoid national insurance for up to three years, needing only to pay into the Indian social security system—payments that are, unsurprisingly, much lower than here in the UK. This national insurance holiday will make it much cheaper to hire Indian workers, especially in fields such as IT and engineering, than domestic talent. Imagine a British IT firm is set to hire a computer programmer for £60,000 a year. On top of that, an employer must pay £8,250 in national insurance. That totals £68,250. To hire someone on the same salary, their Indian competitor would only need to pay about £1,470 to the Indian employee provident fund, to which mandatory contributions are capped at 15,000 rupees a month—about £120. That totals £61,470. Under the Government’s deal, it would, therefore, be at least 10% cheaper to hire an Indian worker than a British one. That is absurd.