India hopes to conclude social security pacts with all EU members in 5 yrs

India has linked its commitment in services under the trade deal with the European Union to derive commitment to negotiate social security agreements in next five years with its 12 member countries with whom it currently doesn’t have such pacts. 

Social Security Agreement ensures continuity of social security benefits on a reciprocal basis and thus avoids potential dual contributions for Indian workers and employers in the future. 

Briefing reporters, commerce secretary Rajesh Agrawal said while normally social security agreements are in the remit of the member states and EU doesn’t have any such arrangement with other countries, India has become the first country to have a clause on social security because this is crucial for India. “We have linked it to some of our forward MFN (most favoured nation) commitments under services. For the first five years, these commitments will stand along with the nudge to the member states to move towards social security agreements. These are agreements which naturally have to be done bilaterally. Today, we already have (such deals) with 14 out of 27 member states and we hope in the next five years, we will have the remaining 13 deals.” 

At present, India doesn’t have social security agreements with Ireland, Italy, Spain, Greece, Malta, Cyprus, Bulgaria, Romania, Slovakia, Croatia, Estonia, Latvia and Lithuania. 

Through the MFN forward clause, India promises that if in future it gives better treatment to some other trade partner in certain service sectors, it will extend that same improved treatment to the EU. However, this clause will be valid for five years. If the 13 EU members do not sign social security agreements with India during this time period, it can withdraw the MFN forward commitment. 

“Independent professionals intending to provide services to EU clients get certainty in 17 sub-sectors for Independent Professionals, covering IT, R&D, and higher education, creating expanded opportunities for Indian professionals and knowledge-driven trade. India and EU have agreed on a constructive framework to enable Social Security Agreements in 5 years with all the EU Member States and a continuing conducive framework for entry of India students to study and avail post study work visa,” the commerce department said in a statement. 

The commerce department said India’s predictable access to EU’s 144 services subsectors (which includes IT/ITeS, Professional Services, Other Business Services and Education Services) will provide boost to Indian service providers and enable them to provide competitive world class Indian services to EU’s consumers while EU’s access to 102 services subsectors offered by India will bring in high tech services, investment into India from EU resulting in a mutually beneficial arrangement. 

India concluded a similar double-contribution convention or a social security pact with the UK last year that will give Indian skilled professionals working in Britain a three-year exemption from social security payments. 

This is expected to benefit over 60,000 employees from the information technology (IT) sector alone. It will lead to savings of around 20 per cent of employee salaries.