The US Trade Representative Katherine Tai on Saturday said India has just furnished the required information for the proposed social security agreement, a move that will help ease the tax burden of Indian professionals in the US, especially those with temporary work visas.
Tai told reporters after the conclusion of the 14th India-US Trade Policy Forum (TPF) meeting: “Yes, the Indian government is in touch with our social security administration… We have received that information on the eve of the TPF…. the ball is back in our court, but it’s just landed in our court. So there is a lot more work to do.”
The information submitted by India pertains to the social security schemes run by India, and taxation. A joint statement issued on Saturday said the TPF, jointly chaired by Tai and commerce minister Piyush Goyal, “encouraged further engagement to establish a stronger basis for future agreement.” India has been asking for the social security (totalization) 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 such taxes in 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 Indian side has submitted data related to the Employee Provident Fund, National Pension System and ESIC.
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The US has a totalization agreement with 30 major economies like the UK, France, Italy, Brazil, Poland and Japan.
Tai said the US side also raised the issue of India’s import management system for specified IT Hardware. Tai said they have asked India to hold consultations with them and other stakeholders on such matters for policy certainty. At the TPF meeting India conveyed its willingness to continue engaging on the issue with the US and other stakeholders and the US had expressed its willingness to collaborate with India on the shared objective of supply chain resilience in the sector.
According to the joint statement issued after the TPF meeting, the two ministers expressed commitment to launch future joint initiatives in certain areas, including critical minerals and trade in high tech products, in which the US and India will develop a forward-looking roadmap for enhanced cooperation. As part of the roadmap, she said “we are going to begin with fact finding exploration and establishing a common vocabulary”. When asked about agri-related issues on both sides, the USTR said America is looking at greater market access for products such as almonds, walnuts, blueberries, and cranberries. India has issues with regard to grapes, mangoes and pomegranates in the US market.
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On India’s concerns over delay in visa for Indian businesses raised by Goyal in Friday’s meeting, Tai said the USTR office facilitates the conversation on this subject with the parts of the US administration that are responsible for these issues.
