Jonathan Reynolds backs UK-India trade deal despite Tory tax backlash
As the UK and India move into the final phase of negotiations on a landmark free trade agreement (FTA), business and trade secretary Jonathan Reynolds has doubled down on his support of the deal – despite mounting Conservative criticism over provisions relating to labour mobility and taxation.
The UK-India FTA, concluded in principle on 6 May 2025, and promises to be India’s most comprehensive trade deal to date, with forecasts projecting a £4.8bn boost to the UK’s GDP and a £25.5bn increase in bilateral trade by 2030.
The deal also includes a double contributions convention (DCC) designed to eliminate the double social security taxation on temporary workers moving between the two countries – a move intended to smooth business operations but one that has sparked a fierce political row.
At the India Global Forum on 18 June, Reynolds underscored the UK government’s determination to seal the agreement.
“This is a chance to show that the UK is serious about deepening our economic relationship with India and completing a major free trade agreement,” Reynolds said at the event.
Momentum amid controversy
“What we want to achieve with the visit is momentum, pace and getting it done”, Reynolds said on Wednesday, stressing that “the political will exists – not just on the UK side, but on the Indian side as well – to get this done”.
This comes as bilateral trade between the UK and India grew to $21.34bn in 2023-24, with the deal targeting a doubling of trade to $120bn within five years.
However, the deal’s provisions on labour mobility, particularly the clause exempting some Indian workers seconded to the UK from paying National Insurance contributions, have drawn sharp criticism from the Tory party.
Opponents claim this creates a “two-tier tax system” that risks undercutting British workers.
Reynolds rejected these claims today, saying: “There is no situation where I would ever tolerate British workers being undercut through any trade agreement we would sign”.
He said that the clause aligns with international norms to avoid double social security taxation – a standard practice already in place with over 50 countries including the US and Canada.
The exemption is reciprocal, affecting only specific skilled workers with visa caps and existing routes, and applies equally to British workers posted to India.
Yet Tory figures have remained vocal. Former trade secretary Kemi Badenoch revealed she had refused to greenlight a similar deal during her tenure, while Nigel Farage decried the announcement as an attempt by the Labour government to “bury” the deal post-local elections.
This political push back illustrates the delicate balancing act the UK government faces in securing a trade deal which pledges to redefine Britain’s post-Brexit global trading relationships, despite being fraught with domestic political risk.
Reynolds: A defining moment for UK trade
Reynolds insisted the deal’s potential benefits for both economies far outweigh the controversy.
“I believe this will lead to an incredibly positive outcome for both countries. I think it is a major moment in Britain’s trading relationships”, he said.
As the UK government finalises the agreement, the outcome will impact economic ties with one of the word’s fastest-growing markets but also signal the government’s ability to navigate trade in a post-Brexit era.