The Labour government’s freshly inked trade agreement with India has kicked up a political firestorm, with critics claiming the deal hands foreign workers a leg up while saddling British employees with higher taxes.
Announced Tuesday, the U.K.-India accord includes a provision extending National Insurance contribution (NIC) exemptions for Indian workers stationed temporarily in Britain—from one year to a full three. The move, aimed at easing the cost burden for companies hiring from abroad, comes just weeks after the government hiked NICs for domestic employers—leaving many to wonder whose side Labour’s really on.
Opposition MPs wasted no time piling on. Shadow Business and Trade Secretary Andrew Griffiths didn’t mince words, accusing Prime Minister Keir Starmer of “selling out British workers.” He fumed on social media: “Keir Starmer has just signed a deal that lets Indian workers skip National Insurance after raising it on everyone else here. Every time Labour makes a deal, Britain loses.”
Tory heavyweight Kemi Badenoch, who previously led trade negotiations under Rishi Sunak’s government, echoed the criticism. In her view, the Labour leader is creating “two-tier taxes from two-tier Keir”—offering breaks to foreign hires while squeezing taxpayers at home. According to political insider Christian Calgie, Badenoch had resisted similar concessions while in office, holding the line on visas and NIC exemptions.
Former Home Secretary Suella Braverman took the gloves off too, accusing Labour of “caving” to Indian demands and flooding the job market with cheaper labor at the expense of British workers.
The Indian government, meanwhile, celebrated the deal as a major win. In an official release, New Delhi said the exemption under the Double Contribution Convention would slash costs for Indian companies, making them more competitive in the British market.
That sentiment didn’t sit well with Reform UK leader Nigel Farage, who’s riding high in current national polls. In a fiery video posted online, he slammed the agreement as a “cut-price gateway for mass immigration” with zero public input or scrutiny. “This deal lets Indian companies send workers here tax-free for three years. And just as they’re getting a break, taxes on British workers are going up,” he warned. “It’s outrageous.”
While Labour has yet to respond to the growing criticism, opposition parties and trade analysts are already calling for transparency on how the deal might affect Britain’s labor force and public services. As Farage put it, “There hasn’t even been an impact assessment.”
With the dust still far from settling, Starmer’s government may find itself on the defensive—not just over the details of the deal, but over whose interests it really serves.
