Upping the ante, India has, for the first time, demanded that the US set a timeframe to finalise the long-pending bilateral social security agreement — also called a totalisation pact.
Refusing to let Washington dilly-dally anymore on a matter that is costing the Indian IT industry an estimated $4 billion every year in non-refunded social security payments, New Delhi is insisting on a solution by the year-end.
A Commerce Ministry official told BusinessLine that, “Commerce Secretary Rita Teaotia, at a recent meeting with Deputy US Trade Representative Robert Holleyman, said that India wanted a totalisation pact roadmap before the bilateral trade policy forum scheduled for October.”
In the absence of a social security agreement, Indians working on short-term visas in the US have been losing their social security contributions as they are neither eligible for a refund nor are they able to take advantage of the scheme.
According to US laws, social security refund can be claimed by foreign workers after 10 years of service whereas the H1B visas are given for only six years. New Delhi wants workers on short-term visas exempted from contributing to social security.
“Although the US agreed earlier this year to discuss a possible social security agreement with India, not much movement has happened on the issue as Washington has continued to argue that its laws do not permit such a pact with countries that do not have an adequate social security net,” the official said.
New Delhi has stated that instead of giving such arguments, the US should examine the social security pacts India has signed with several European countries with which the US too has similar agreements.
“We have been going round in circles for so long. It is time the US appreciated that India means business. If it wants to continue to have cordial business relations with us, it has to address the social security issue,” the official said.
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