Modi, Trump Discuss Totalisation Agreement as India Seeks $12Bn Worth Savings of Its Professionals in US

New Delhi: At the recently concluded visit by US President Donald Trump, India took up the issue of a Totalisation Agreement apart from the H1-B work visa matter pertaining to Indian professionals in the US.

Totalisation is broadly the money that Indian professionals contribute to the US social security scheme while they work in America.

Many head back home before 10 years, which is essentially the lock-in period before one can withdraw from the social security contribution. Hence, such professionals have to leave their savings behind.

Also, when an Indian employer sends a worker to the US to continue employment, the employer and the worker pay double social security taxes.

A Totalisation Agreement will provide relief to both the Indian employer and employee.

India has given a ball-park figure of about $12 billion if the US agrees to let those who have returned earlier withdraw their corpus under a Totalisation Agreement and if it applies retrospectively.

Sources said though the need for a Totalisation Agreement has been taken up earlier at the level of officials, it was for the first time that the matter was raised at the level of a summit-level meeting that had the principals like the President and the Prime Minister.

News18 has learnt that President Trump heard the issue out but since the matter involved a huge amount of money and needs the US Congress approval, there wasn't any immediate response to the matter.

There are two points which are holding up a Totalisation Agreement with India and will need changes in US laws. These are, first, the country with which US signs a Totalisation Agreement needs to have an overwhelming social security coverage of about 80%, and second, the repatriated money should be reciprocal, which means Americans working in India should be taking back pretty much a similar amount.

India doesn't fulfil these two conditions hence an amendment in law is needed.

The two countries will continue to look at the issue that could be of mutually beneficial. This has been a long pending demand from the Indian side and with the matter having been escalated to the top, expectation is that it may help move it faster now.