Indians in US may get to bring back social security contribution
Wednesday, July 20, 2011http://economictimes.indiatimes.com/news/nri/returning-to-india/indians-in-us-may-get-to-bring-back-social-security-contribution/articleshow/9291675.cms
India will look to use the US urgency to conclude a bilateral investment treaty to push negotiations on the long-pending totalisation agreement that would exempt Indians working there on short-duration visas from contributing to social security.
"Since US is keen on a BIT (bilateral investment treaty) and we have been pushing for a social security agreement for long,it would make sense to link the two and we are exploring such a possibility," an official in the ministry of overseas Indian affairs told ET. Indian workers will save nearly $1 billion every year in the form of social security contributions made by them while working on short-term visas, a study by IT industry body Nasscom estimates.
In contrast, US expatriates contribute just $150 million to the Indian social security system every year, explaining the country's lack of enthusiasm in speeding up negotiations, the official said. Overseas workers need to stay for at least 10 years to qualify for a refund, which means contributions made by workers on short-term visa are a waste.
Once a totalisation agreement is in place, Indians working for less than 10 years in the US will be allowed either exemption or a refund. India conveyed its seriousness on early negotiations during commerce and industry minister Anand Sharma's US visit last month. A team from the US Social Security Administration is likely to visit India soon to take the issue forward.
