Social security pact with Japan to be effective from October

By: | Published: July 25, 2016 2:39 PM

Employees posted by Indian establishments in Japan will not be required to contribute towards social security schemes in that country from October 1, as a bilateral agreement will come into force.

India till date has signed SSA with 19 countries. The SSAs have been in operation with 15 countries so far. (Reuters)India till date has signed SSA with 19 countries. The SSAs have been in operation with 15 countries so far. (Reuters)

Employees posted by Indian establishments in Japan will not be required to contribute towards social security schemes in that country from October 1, as a bilateral agreement will come into force.

Similarly, Japanese employees posted in India would enjoy the same benefit after producing a certificate of coverage certifying that they are contributing towards social security schemes such as PF and pension in their home country.

“The Agreement on Social Security between India and Japan shall come into force with effect from October 1, 2016. With this addition number of Social Security Agreement (SSA) that would become operational would be sixteen,” Labour Ministry said in statement.

According to the statement, Ministry of External Affairs, along with Employees’ Provident Fund Organisation (EPFO) – the competent authority for negotiating and concluding SSAs have completed the formalities for the Agreement to enter into force.
The SSA between India and Japan was signed in Tokyo on November 16, 2012. Bilateral SSA are made with other countries to protect the interests of Indian professionals, skilled workers working abroad.

India till date has signed SSA with 19 countries. The SSAs have been in operation with 15 countries so far.

An SSA generally provides for detachment, totalisation and portability of Social Security benefits between agreeing nations.

While under Detachment provisions, International Workers are exempted from making contribution in the host country, the Totalisation allows aggregating residency periods of social security contribution made by the Indian worker / professional in India and the foreign country to qualify for retirement benefits. The Portability further allows one to avail benefits in either country.

The comprehensive SSA between India and Japan will favourably impact the profitability and competitive position of companies by reducing their cost of doing business abroad.

It said that Indian and Japanese workers who are working in Japan and India respectively will benefit from the pact. The SSA will also help more Japanese companies to consider India as a destination for their manufacturing investments.

Further to this, it said that BRICS Second Employment Working Group meeting is being held in Hyderabad, on July 27-28 July 2016.

The forum is being planned to impress the BRICS group to adopt a resolution to take the necessary steps to ensure that SSAs are entered into between the member countries of BRICS.

This is all the more because BRICS nations have individually signed SSAs with other nations. Trade relations between BRICS nations have been increasing over the years and major Industries and Enterprises from respective nations are making investments, it added.

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