India and the US were able to make “good progress” in negotiating the long-pending totalisation agreement that has emerged as a major hurdle for Indian companies seeking to invest and operation in America.
It seems the matter was discussed at length during the India-US Strategic and Commercial Dialogue that took place in the US last month, preceding Prime Minister Narendra Modi’s visit there.
“On a totalisation agreement, we had a second round of talks between both the governments. The last discussion was held in summer. We look forward to continue these discussions. I think the gaps in understanding each other’s systems are narrowing, which is good,” US Ambassador to India Richard Verma said here on Tuesday.
Indian workers account for almost 50 per cent of employment-based US green cards and 40-50 per cent of the H1-B and L-1 professional visas. These workers make yearly contributions of about $2 billion towards US’ social security system.
However, according to the US’ norms, these workers need to complete 10 years for being eligible to enjoy the benefits of this contribution. As a result, workers going there for work for a short period are not able to repatriate their contributions.
“We have certain statutory requirements that we have to meet, we have to better understand India’s coverage scheme for social security and I think when people sit across the table and share their detailed information it’s helpful and I think we made good progress on the subject of totalisation,” Verma added, while launching the US government’s Select USA initiative aimed at facilitating Indian investments to the US. India, on its part, also seems to be bullish that the negotiations for a totalisation agreement were also “progressing satisfactorily”. However, it will not be anytime soon that the agreement will be sealed due to wide gaps in the ongoing talks, a senior official told Business Standard.
So far, only five rounds of talks have taken place ever since the talks started in 2010.
On the issue of granting visas to Indian workers, Verma said India used up 65 per cent of the H-1B visas whereas 40 per cent of Indian companies get L-1 visas.
“President has advocated a comprehensive reform in the immigration system and till that time, I would encourage people to look at how far and how strong the Indian position is with regards to business travel and business visas for the US. It is a pretty good story overall,” he said.
Two-way trade in goods and services between both countries increased to $105 billion in 2014 from $19 billion in 2000. Both sides have set a target of expanding it to $500 billion in the coming years.