India-UK Free Trade Agreement Faces Scrutiny Over Tax Implications

 

The recently signed India-UK Free Trade Agreement, hailed as a landmark deal, is facing criticism over potential tax revenue losses for the UK. An internal Treasury analysis estimates that the agreement could cost the UK approximately £200 million annually due to a national insurance exemption for Indian workers transferred to the UK by their companies. This exemption, valid for the first three years, was a key demand by Indian negotiators to avoid double taxation.

Critics argue that the exemption could undercut British workers and increase immigration, as the deal expands job categories eligible for the Global Business Mobility Visa from 15 to 33. However, UK Prime Minister Keir Starmer defended the agreement, emphasizing its alignment with over 50 existing international agreements and its potential to boost the UK economy by £4.8 billion by 2040. The debate continues over balancing economic growth with impacts on tax revenue and labor market dynamics.