India’s negotiations on a totalisation pact with the US has had a shaky start with Washington rejecting New Delhi’s claim that schemes such as the Atal Pension Yojana and Rashtriya Swasthya Bima Yojana should be considered while determining the size of population covered under the social security net.

The US says it does not have the legislation mandate to negotiate totalisation agreements, also called social security pacts, with countries that have less than half its population under social security cover.

“A team of officials from the Ministry of Overseas Indians that had gone to Washington to negotiate a social security pact a few weeks ago, came back disappointed as they were told that most of the schemes cited by the team could not be considered as social security as these were voluntary and not mandatory,” a Government official told BusinessLine .

IT companies A totalisation agreement could help Indian IT companies operating in the US save up to $4 billion in annual deposits made into the US’s social security kitty that Indian workers could neither utilise or get refunded.

The team gave a presentation to the US social security officials on schemes such as the RSBY, Atal Pension Yojana, the Employees Provident Fund Organisation and various old age and accident cover schemes. “The team argued that if one counted the population covered under such schemes, it would easily be more than 50 per cent. But the argument was dismissed by the US,” the official said.

The Commerce Ministry will now step in again and rake up the matter with the US Department of Commerce, pressing for a relaxation in rules.

“We will ensure that the totalisation pact remains the focal issue for us at the Trade Policy Forum meeting that is scheduled to take place soon. If the US wants to establish stronger trade and economic ties with us, it cannot be so dismissive towards our concerns,” the official said.

India wants a social security pact with the US that will exempt Indian workers on H1B visa from contributing to social security as they are not eligible for refunds.

According to US laws, social security refund can be claimed by foreign workers after ten years of service whereas the H1B visas are given for only six years.

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