Discuss social security pact: India urges US

The absence of the Totalisation agreement also affects the American professionals working in India - they are not allowed to take back their social security savings whenever they leave

By: ENS Economic Bureau | Amitabh Sinha & Debabrata Mohantynew Delhi | Published:October 21, 2016 2:57 am

India on Thursday urged the United States to discuss the issues concerning Totalisation agreement or social security pact as it is affecting the movement of Indian-origin IT professionals who are in United States.

“We have strongly urged the US to engage in negotiations for signing of a Totalisation Agreement. It is being heard and I hope there will be a positive response from their side,” said Nirmala Sitharaman, Union Commerce and Industry Minister, after the delegation-level meeting of 10th India-United States Trade Policy Forum (TPF).

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US Trade Representative Michael Froman is leading the American delegation for the TPF. “We very clearly identified this (Totalisation agreement) as one of the non-tariff measures … which is restricting the movement of IT professionals,” Sitharaman said. India had initiated the discussions regarding this agreement with US administration in December 2007.

The absence of the Totalisation agreement means that the Indian-origin workers, who are working in the US, will not get back their social security contributions unless they spend minimum ten years in that country. Currently, more than five lakh Indian-origin professionals are working there and they contribute more than $1 billion annually to the US social security system.

The absence of the Totalisation agreement also affects the American professionals working in India – they are not allowed to take back their social security savings whenever they leave. The US as well as India have entered into Totalisation Agreement with several other nations for the purpose of avoiding such loss of social security savings. If the two countries sign this agreement with each other, professionals of both the countries would be exempted from social security taxes when they go to work for a short period in the other country.