Indian's working in US could soon get social security cover

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Indian's working in US could soon get social security coverThis is one big reason to cheer for all Indian professionals settled in the US. India's demand for social security cover for its professionals in the US could be realised soon with Washington agreeing to resume talks on the matter as early as May. The development signals an improvement in Indo-US economic ties since prime minister Narendra Modi travelled to the US in September and US president Barack Obama's New Delhi visit on Republic Day.
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A totalisation pact, which ensures that workers don't lose out on social security benefits, has been India's key demand in bilateral talks. Indian professionals contribute more than $1 billion each year to the US social security system without getting any benefits in return.

"The US has agreed to take up our demand for a totalisation pact and in all probability there is going to be a bilateral meeting on this in May. There were no discussions on this for the last five years, so this is clearly a move forward," said a government official.

India announced a slew of universal pension and social security schemes in the budgin February, including Atal Pension Yojana and Universal Social Security scheme, which will help strengthen India's negotiating position for the bilateral pact. This is the first time India is proposing to extend a universal social security scheme.

"The budget announcement of pension scheme will definitely give weight to our talks," said the official.

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India has argued that the US social security policy discriminates against Indian workers in the US as they end up losing their social security contributions due to a discrepancy in the visa and social security regimes. While work visas are issued for a maximum of six years, eligibility for social security benefits in the US requires residence of over 10 years.

The contribution by Indian professionals to the US social security programme is estimated at more than $25 billion during the past decade.

Four rounds of talks on totalisation took place till 2010, which discontinued thereafter.

"There was a lull on the matter for the past five years. But now we will be picking up threads from where we left and take the talks forward. The issue directly impacts our trade in services," said the official. The talks will be led by the Ministry of Overseas Indian Affairs from the Indian side.

The US social security programme constitutes 37% of government expenditure and 7% of GDP.

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The matter had been taken up during the trade policy forum meeting in November last year, which took place after a gap of four years and saw comprehensive discussions on all aspects of bilateral trade and investment. It was co-chaired by commerce and industry minister Nirmala Sitharaman and her US counterpart Michael Froman.

The trade policy forum is the principal trade dialogue body between the two countries, with five focus groups - agriculture, investment, innovation and creativity, services and tariff and non-tariff barriers.

At present, bilateral trade is about $100 billion.

The US has entered into totalisation pacts with 24 nations.

"Both India and the US have entered into similar agreements with countries like Denmark, Belgium, Germany and Canada and there is no reason why such an agreement cannot be concluded between India and the US," said the official.