Social Security Agreement Of India
New Delhi and Washington had several roundtable discussions on a totalization agreement a decade ago. But the talks were suspended because the United States said that India had not been able to offer its citizens enough social security and that the two countries` systems were too incompatible for a pact to be drawn up. Prime Minister Narendra Modi spoke of the need for the totalization agreement, while Foreign Minister Harsh Vardhan Shringla said that the two issues relating to the H-1B visa, which has a direct impact on the IT sector, and totalization agreements with the US authorities were addressed. „India is in favour of discussions due to the introduction of new social security systems in the country in recent years and the expansion of coverage, which has led to greater compatibility of the two countries` systems,“ a development official told BusinessLine. „The SSAs offer three benefits overall, including preventing double social security contributions for workers, simply transferring benefits and aggregating contribution periods in two countries to avoid loss of benefits,“ Rao said. India supports the proposed discussions with the US Social Security Administration (SSA) on the long-standing totalization agreement, believing that the two countries` systems are now more compatible than before. The deal could help Indian companies in the United States save up to $4 billion in social security contributions a year. „The United States believes that due to the incompatibility of the two social security systems, the totalization agreement may not be plausible in the current context,“ says the joint CII-USIBC report, which recommends an analysis of the feasibility and prospects of an agreement. A totalization agreement, commonly known as the Social Security Agreement, exempts foreign workers with non-permanent visas from social security contributions in the country of employment, where they are not entitled to reimbursement. This time, however, India believes that its chances of convincing the United States of compatibility are greater, as it has introduced several new social security systems for the elderly and those in the disorganized sector in recent years.
Despite years of negotiations, the United States has not signed the Totalization Agreement, also known as the Social Security Agreement (SSA) with India, to protect the rights of IT and other service workers who share their professional careers between India and the United States. Some believe, however, that the United States may not be willing to consider a pact until India has a universal social security system in place. „It is possible that the US SSA will insist on a universal social security system covering the entire population before agreeing to a totalization pact,“ said a Delhi trade expert. India on Tuesday called on the United States to consider signing a totalization agreement to avoid a double deduction of the incomes of workers working in the other company`s countries and to allow Indian partial-unemployment workers in the United States to recover billions of dollars in social security deposits. The Indian industry in the United States pays about $1 billion for Social Security, which can only be redeemed after 10 years.