Justin Joseph
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Bid to ink India-US social security accord in time for Obama's visit
NEW DELHI: Efforts to conclude the Indo-US social security agreement may be on the fast track, buoyed by an increasing number of American workers in India, who are likely to benefit from the strengthening of bilateral ties.
The two sides are hoping to conclude negotiations for the totalisation agreement in time for US President Barack Obama's visit in November.
Though many feel that it is too ambitious, renewed pressure from corporates of both the countries to make their businesses more competitive could see a convergence of interests.
"We are going to take up the issue as a priority in the trade forum meeting in September," Union commerce ministerAnand Sharma said.
Presently, around three lakh Indians are working in the US on non-immigrant visas. Typically, these workers stay in the US only for a period between three and seven years because most of them fail to get a green card for further stay. However, they have to contribute 7.65% of their salary towards social security from the very first day.
It is estimated that the total contribution made by these workers annually amounts to about $1 billion, and the cumulative contribution made, so far, could be to the tune of $10-15 billion.
However, these workers are losing their entire contribution because under the US law a worker must stay for a minimum of 10 years.
Conversely, of the Fortune 500 companies, about 125 firms have their research and development units based in India. According to sources in the ministry of overseas Indian affairs, the two sides have recently decided to exchange notes on the number of citizens working in each other's countries, and the financial implications.
Sources, however, added that there was much ground that needed to be covered and the countries were nowhere close to even a draft agreement. Going by the past track record, it can be assumed that it will take quite sometime before the accord is signed.
The agreement will also allow US professionals working in India to obtain refund of their social security payments at the time they leave the country.
A recent amendment to laws has assured that foreign workers contribute 12% to the employees provident fund, and refund is allowed according to the bilateral agreement or on a reciprocal basis.
Read more: Bid to ink India-US social security accord in time for Obama's visit - India - The Times of India Bid to ink India-US social security accord in time for Obama's visit - India - The Times of India
NEW DELHI: Efforts to conclude the Indo-US social security agreement may be on the fast track, buoyed by an increasing number of American workers in India, who are likely to benefit from the strengthening of bilateral ties.
The two sides are hoping to conclude negotiations for the totalisation agreement in time for US President Barack Obama's visit in November.
Though many feel that it is too ambitious, renewed pressure from corporates of both the countries to make their businesses more competitive could see a convergence of interests.
"We are going to take up the issue as a priority in the trade forum meeting in September," Union commerce ministerAnand Sharma said.
Presently, around three lakh Indians are working in the US on non-immigrant visas. Typically, these workers stay in the US only for a period between three and seven years because most of them fail to get a green card for further stay. However, they have to contribute 7.65% of their salary towards social security from the very first day.
It is estimated that the total contribution made by these workers annually amounts to about $1 billion, and the cumulative contribution made, so far, could be to the tune of $10-15 billion.
However, these workers are losing their entire contribution because under the US law a worker must stay for a minimum of 10 years.
Conversely, of the Fortune 500 companies, about 125 firms have their research and development units based in India. According to sources in the ministry of overseas Indian affairs, the two sides have recently decided to exchange notes on the number of citizens working in each other's countries, and the financial implications.
Sources, however, added that there was much ground that needed to be covered and the countries were nowhere close to even a draft agreement. Going by the past track record, it can be assumed that it will take quite sometime before the accord is signed.
The agreement will also allow US professionals working in India to obtain refund of their social security payments at the time they leave the country.
A recent amendment to laws has assured that foreign workers contribute 12% to the employees provident fund, and refund is allowed according to the bilateral agreement or on a reciprocal basis.
Read more: Bid to ink India-US social security accord in time for Obama's visit - India - The Times of India Bid to ink India-US social security accord in time for Obama's visit - India - The Times of India
