Social Security Totalization Agreement With India

“The United States has formalized totalization pacts with countries like Canada and Australia. India also hopes to be on this list,” the official added. India supports the proposed discussions with the US Social Security Administration (SSA) on the long-standing totalization agreement, believing that the two countries` systems are now more compatible than before. The deal could help Indian companies in the United States save up to $4 billion in social security contributions a year. “The United States believes that due to the incompatibility of the two social security systems, the totalization agreement may not be plausible in the current context,” says the joint CII-USIBC report, which recommends an analysis of the feasibility and prospects of an agreement. New Delhi and Washington had several roundtable discussions on a totalization agreement a decade ago. But the talks were suspended because the United States said that India had not been able to offer its citizens enough social security and that the two countries` systems were too incompatible for a pact to be drawn up. Indian workers, especially computer scientists, make huge social security contributions in the U.S. social security system while working in the United States, but most of them return home before they have the right to withdraw money from their social security contributions and abandon their savings.

A totalization agreement between the two countries would save them from this financial loss. “The issue of totalization has also arisen. There was a feeling that Indian pros who spend less than eight years and contribute to social security… really need to get that money back,” Shringla said Tuesday. Some believe, however, that the United States may not be willing to consider a pact until India has a universal social security system in place. “It is possible that the US SSA will insist on a universal social security system covering the entire population before agreeing to a totalization pact,” said a Delhi trade expert. “The SSAs offer three benefits overall, including preventing double social security contributions for workers, simply transferring benefits and aggregating contribution periods in two countries to avoid loss of benefits,” Rao said. According to industry estimates, Indian companies, mainly in the information technology sector, lose up to $4 billion a year in U.S. Social Security, which is never reimbursed.

The Trade Promotion Council for India (TPCI) proposed Tuesday that India and the United States sign a totalization agreement because it will provide social security to Indian professionals in America. With regard to H-1B visas, Shringla said that Indian authorities had addressed the issue during Tuesday`s dialogue with their American counterparts and stressed that Indian experts are making a significant contribution to the high-tech sector in the United States. According to an industry estimate, Indians working in the United States lose nearly $1 billion a year in social security contributions. This time, however, India believes that its chances of convincing the United States of compatibility are greater, as it has introduced several new social security systems for the elderly and those in the disorganized sector in recent years. At a joint press conference with the US President on 25 February at Hyderabad House in New Delhi, Prime Minister Modi said: “I have asked President Trump to continue to discuss the contribution of our social security experts as part of a totalization agreement.

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