India's Proposal for Social Security Totalisation Agreement with the US
India has proposed a social security totalisation agreement with the United States, similar to the Double Contributions Convention (DCC) it signed with the United Kingdom. This proposal is part of the ongoing Bilateral Trade Agreement talks between India and the US.
Details of the DCC Agreement with the UK
- Signed on July 24 under the Comprehensive and Economic Trade Agreement (CETA).
- Exempts Indian workers and their employers from UK social security contributions for up to three years during temporary assignments.
- Expected to benefit around 75,000 workers and over 900 companies, saving more than ₹4,000 crore.
Objective of the Totalisation Agreement
- Coordinates social security systems between signatories to avoid double contributions.
- Ensures workers contribute only to their home country's social security system.
- Allows recovery of contributions made while working abroad if benefits are not availed.
Context of the Proposal to the US
- Indian workers in the US contribute approximately $3 billion annually to the American Social Security system.
- Over the past decade, contributions have totaled $27.6 billion, yet many Indian workers cannot claim benefits due to their temporary work visas.
- US social security benefits require contributions for at least 40 quarters (10 years), which many Indian workers do not meet.
Challenges and Developments
- The US has concerns about India's Employees Provident Fund (EPF) scheme's adequacy, as it does not cover half the working population.
- India conducted a national social security data-pooling exercise to assess social protection coverage.
- The International Labour Organization (ILO) estimated an increase in social security coverage in India from 19% in 2015 to 64.3% in 2025.
The ongoing negotiations reflect India's commitment to ensuring fair treatment of its workers abroad and enhancing the trade relationship with the US.
