India Eager For Totalization Treaty

From Today Share Market Tips:

INDIA is trying to expedite a totalisation agreement with the US that would exempt Indian professionals working for a limited period in that country from paying mandatory contributions for social security. India has included discussions on the social security agreement (SSA) in the Indo-US bilateral trade talks launched recently.

Sources said India is attempting to link progress in the agreement to the bilateral investment treaty (BIT) being worked out between the two sides. Since the US is keen on BIT, India is hopeful that linking the two would ensure the totalisation agreement would also be worked out. Indian professionals could save a total of $1 billion they contribute to social security annually.

Official sources told ET a team of officials from the ministry of overseas Indian affairs and the commerce and industry ministry will visit the US soon to discuss the pact. They would take forward the talks that took place in India earlier this year. Both sides are working on the pre-requisites and the content of the proposed pact. Sources said notes would be exchanged by the two sides in the next meeting.

“India is very keen on signing a totalisation agreement with the US. We have been trying to persuade the US for a long time. Now that the discussions are taking place in a structured manner, we hope something will work out,” an official said.

The US has signed totalisation agreements with 16 countries. However, it has been hesitating to sign one with India as the country’s social security structure is vastly different from the US social security net. US officials have also met officials from the Employee’s State Insurance Corporation and provident fund commission of India.