„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. Given the intensification of economic relations between the two countries, it is important to take steps to reduce the extra costs associated with dual insurance liability. As a result, the new rules have been amended in the interests of investing companies and their employees. The agreement thus exempts workers working in other countries from the introduction of the host country`s pension scheme. The volume of bilateral trade between India and Germany has grown dynamically in recent years. This has led to an increase in trade between professionals from both countries, creating the need to simplify social security rules between the two countries. According to Richa Mohanty Rao, partner of the law firm Cyril Amarand Mangaldas, SSAs are akin to double taxation agreements in which workers in the signatory states are not subject to the social security laws of the host state when they contribute in their country of origin.
The result is a more equitable treatment of employees and employers on the basis of reciprocity, she added. India on Tuesday called on the United States to consider signing a totalization agreement to avoid a double deduction of the incomes of workers working in the other company`s countries and to allow Indian partial-unemployment workers in the United States to recover billions of dollars in social security deposits. A bilateral social security agreement signed on 8 October 2008 between India and Germany (implemented on 1 October 2009) is the first step in this direction. The Indian industry in the United States pays about $1 billion for Social Security, which can only be redeemed after 10 years. With a temporary highly qualified visa holder`s lifespan of three to six years, most workers are unable to obtain benefits, the Confederation of Indian Industry (CII) and the United States India Business Council (USIBC) said Tuesday in a new report. The agreement applies to workers temporarily posted to a branch of a company in the other state party to fulfill or enter into certain contracts. The agreement will protect the interests of all professionals who are sent to Indian offices by Indian companies to their German subsidiaries or by German companies on the basis of short-term contracts (up to 48 months with the possibility of renewal of 12 months) by benefiting from an exemption from social security contributions in their host country. While working abroad, these workers are only subject to the social security rules of their country of origin. As per day, India has SSAs with at least 18 countries and the United States has an agreement with more than 24 nations. „I told President (US) Trump that the contribution of our Social Security experts should be discussed further as part of a totalization agreement. It will be of mutual interest to both of us,“ Narendra Modi told reporters in New Delhi with Trump. The implementation agreement contains guidelines for technical details.
These include reporting obligations between insurers in both countries, the issuance of certificates and the payment system in the other country.