India is actively pushing for the inclusion of social security agreements (SSAs) in all its Free Trade Agreements (FTAs), including the ongoing negotiations for a trade deal with the United States. This move signifies India's commitment to protecting the rights and welfare of its growing number of professionals working overseas.

What are Social Security Agreements?

Social Security Agreements are bilateral treaties designed to protect the interests of workers and promote the circular migration of skilled labor. These agreements serve several key purposes:

• Export of Social Security Benefits: SSAs allow workers to transfer their social security benefits earned in one country to another.
• Totalization of Insurance Periods: They enable the aggregation of insurance periods from different countries to meet eligibility requirements for social security benefits.
• Prevention of Dual Contributions: SSAs prevent workers and employers from having to contribute to social security systems in both their home country and the country where they are working. This is particularly beneficial for Indian professionals on short-term assignments abroad.

India's Motivation

Several factors are driving India's push for SSAs in its trade agreements:

• Protecting Indian Expatriates: With a growing number of Indian professionals working abroad, particularly in developed economies like the US, UK, and EU, India aims to ensure they do not lose out on social welfare benefits. These agreements ensure that Indian workers, especially those employed by Indian companies overseas, receive social security benefits either in the host country or upon their return home.
• Boosting India's Image: By prioritizing the welfare of its overseas workers, India seeks to enhance its global image as a responsible and caring nation.
• Growing Social Security Coverage: India's social security coverage has significantly expanded, reaching over 64% of its population (940 million people), second only to China. This achievement strengthens India's position and bargaining power in international forums.
• Leveraging ILO Data: The Indian government is using data from the International Labour Organization (ILO), which recognizes India's increased social security coverage, to support its push for SSAs in trade negotiations.

Current Status and Future Prospects

India already has SSAs with 22 countries, primarily in Europe. The recent FTA with the United Kingdom includes a reciprocal SSA, exempting Indian workers on short-term visas (up to three years) from contributing to the UK's national insurance, with a similar provision for UK citizens working in India.

The Ministry of Labour and Employment has urged the Commerce Ministry to prioritize SSAs in ongoing trade negotiations, particularly with the US, and in future FTAs with other countries. Union Minister of Labour and Employment Mansukh Mandaviya and Commerce Minister Piyush Goyal have discussed the matter, focusing on incorporating social security programs in trade negotiations, especially with the US, which hosts approximately 5.2 million Indians.

Benefits of SSAs

• For Workers: SSAs prevent double taxation of social security contributions and ensure continuity of benefits, regardless of where an individual works. They allow skilled workers to contribute to social security only in their home country, avoiding the complexities and costs of contributing to multiple systems.
• For Employers: SSAs save employers from making double social security contributions on behalf of their workers.
• For the Economy: By facilitating the mobility of skilled labor and protecting their social security rights, SSAs can contribute to economic growth and development.

Challenges and Considerations

While the inclusion of SSAs in FTAs offers numerous benefits, some challenges and considerations remain:

• Negotiations with Developed Economies: Developed economies with well-established and tightly regulated social protection regimes may be hesitant to enter into SSAs, as these agreements can impact their potential revenue.
• Reciprocity: Countries must carefully weigh the potential revenue loss against the benefits of facilitating the movement of labor when considering reciprocal SSAs.
• Acceptance by the US: While India is actively pursuing an SSA with the US as part of ongoing trade talks, it remains uncertain whether the US will agree to this demand.

Despite these challenges, India's commitment to including SSAs in its trade agreements reflects its growing focus on the welfare of its global workforce and its ambition to play a leading role in shaping international labor standards.