With an annual $1 billion deposited by Indian workers to the United States’ social security system, India is set to push for a totalisation agreement with the country during Prime Minister Narendra Modi’s ongoing US visit. According to sources, the ministry of commerce that is already negotiating with the US to end the WTO impasse has also begun discussions on an early finalisation of the totalisation agreement between the two countries. “The negotiations on the totalisation agreement have been linked to discussions on other issues of common interest,” said a senior government official. “The Prime Minister has also been briefed on the issue while the external affairs minister Sushma Swaraj who is accompanying him on the trip will also take up the matter with the US government,” he added, pointing out that the US is one of the main destinations where Indians are working. A similar agreement has also been negotiated with Australia — another top destination for Indian citizens, and is likely to be signed by the year end. With over 5 lakh Indians working in the US on non-immigration visas, India has been pressing for a totalisation agreement with the country that would allow repatriation of their social security contributions to India on their return home. Typically, such workers stay in the US for a period of three to seven years and contribute about 15 per cent of their salary to the US social security system. With no totalisation pact in place, these workers lose the entire social security contributions unless they complete 10 years of mandatory contributions. “US workers in India face the same problem but since their numbers are few, it is not a pressing matter for the US. On the other hand, with no such agreement in place, it actually ends up gaining over $ 1 billion annually through contributions by Indian workers,” said the official. India has been trying since 2007 to address this anomaly and had initiated discussions with the US Social Security Administration in December 2007. However, the US had argued that their social security system was not compatible with that of Indian, which is social security system, administered by the Employees’ Provident Fund Organisation. India contends that both countries have signed such pacts with 17 countries in common and so there is some compatibility in their social security systems. Further, India has also launched the National Pension System, which is on the lines of social security schemes run in many countries. While the US finally acknowledged these arguments in 2010, the issue has since then been on a backburner.
