The developed world has never been more interested in the economic activity in emerging markets like India than now. The Indian government’s decision to allow foreign direct investment (FDI) in multi-brand retail makes it an economic hotspot. Inflow of investment means a higher influx of talent and employees from abroad. Besides inflow of international employees, there is a high demand for Indian workers across the globe.
Often, when employees travel to other countries on assignment, they are apprehensive about social security implications. To avoid double social security contribution in the home and host country when employees go on assignment, the countries enter into social security agreements.
India has been developing its network of social security agreements with various countries since 2006. We already have agreements with Belgium, Germany, France, Switzerland, Luxembourg, the Netherlands, Denmark, Hungry, the Czech Republic, South Korea and Norway.
Recently, the Indian authorities have aggressively taken steps to expand its network. Having signed social security agreement with Finland on June 12, 2012, India signed an agreement with Canada on November 6, 2012 — a respite for the many Indian workers in Canada.
We are all well aware of the large number of people of Indian origin living in Canada. India also signed an agreement with Japan on November 16, 2012. Japan has been the second largest investor in India in 2010 and 2011. Leading Japanese companies have many inbound employees in India especially in the automotive sector. As a Swedish retail major readies itself to enter India, the government signed the social security agreement with Sweden on November 26, 2012.
India has signed 15 social security agreements so far. Out of these, the agreements with Hungry, the Czech Republic, Norway, Finland, Canada, Japan and Sweden have not yet entered into force.
As India adds more agreements to its network, it will promote both inbound and outbound employee mobility. The agreement allows employees to continue on the home country social security and claim exemption from the host country social security.
Where employees have or are contributing to the host country social security, the agreement allows ‘totalisation of benefits’ and ‘exportability of benefits’.
Some countries prescribe