India will continue to engage with the US for a social security agreement or totalisation agreement but it will take time as the money involved has grown so large that it would be a major decision for any administration in Washington, commerce and industry minister Piyush Goyal said.
“This is a subject that should have been sorted out many decades ago when the numbers were small and impact was manageable but it was neglected by the governments in India,” the minister said at a press conference on the conclusion of his visit to the US.
India has been asking for the social security agreement or totalisation agreement with the US for the past many years. The main purpose of such an agreement is to eliminate dual Social Security taxation, the situation that occurs when a worker from one country works in another country and is required to pay Social Security taxes to both countries on the same earnings.
Indian workers on temporary work visas, particularly in the IT sector, in the US end up paying social security contributions during their stay and on their return these contributions are neither refunded or of any use to the worker. Totalization agreements also help fill gaps in benefit protection for workers who have divided their careers between the United States and India.
“The subject that has festered far too long and is not going to resolve overnight…So we will continue to have the dialogue with the US…It’s going to take time, we recognise that,” Goyal said.
This issue was also raised at the 6th India-USA Commercial Dialogue on October 3 between United States Secretary of Commerce Gina Raimondo and Goyal
According to some rough estimates, Indians annually contribute approximately $3 billion to the American Social Security system. This estimate does not include additional contributions made by these workers’ spouses who may be employed. The total amount involved till now could be touching close to $ 45-50 billion.