Double contribution deal won't spur a spike in Indian IT workers sent to UK

Despite tax savings from UK-India FTA's social security waiver, analysts say high costs and limited incentives may not significantly boost Indian IT deployments to the UK

A day after the free trade agreement (FTA) was signed between India and the UK, the double contribution convention that exempts employees posted in either country from national social security deductions, has emerged as a contentious issue in the UK spurring worries about job losses. 

While Indian IT firms send thousands of skilled Indian employees to execute projects in the UK,  sector analysts in India feel that the new convention may not lead to a significant increase in the number of Indian employees being sent to the UK.  The Indian IT services industry has a large presence in the UK, as the region is the second largest revenue driver for them along with Europe. 

According to the Ministry of Commerce, the social security deal with the UK, will lead to savings of 20 per cent of salary for Indian employees posted there. At present, the UK has about 60,000 employees from the IT sector. “UK was never a preferable choice for Indian engineers because of high taxes and a high cost of living. With the FTA, it may just become an incentive to go and work there. However, I do not see firms being proactive to send their people there,” an analyst with an international research firm said on condition of anonymity.  So far, Indian professionals working for a limited time period in the UK contributed to the country’s social security funds, but they would not get to access these benefits as they returned to India once a project is complete. 

Tata Consultancy Services (TCS), India’s largest IT services player, has roughly about 24,000 employees in the UK. However, it could not be ascertained how many of these are deputed from India and on temporary work.

 

According to industry experts, about 11,000 could be Indian employees sent onsite.

 

Infosys has a headcount of around 6,000 in the UK, and Europe’s contribution to its revenue was 31.2 per cent in the fourth quarter of FY25. 

HCLTech, the country’s third largest IT services player, has about 4,000 employees in the UK. According to the firm’s website, it has over 12 delivery centres in the UK and 14 innovation labs. 

Bengaluru-based Wipro has around 4,200 employees across the UK, Ireland, and Scotland. In terms of revenue mix, Europe which also includes the UK, contributed 26.1 per cent for Q4 FY25. 

As companies did not share their region-wise employee headcount, these numbers are based on industry analysts' assessments.