India, Brazil finalise social security agreement
India and Brazil have finalised text of the Social Security Agreement (SSA). It will come in force by early 2018 after it is ratified. It will be the first such agreement between the BRICS countries.
This SSA takes forward the spirit of Goa Declaration adopted at 8th BRICS Summit, outcomes of the meetings of BRICS Labour & Employment Ministers held in June 2016 in Geneva and September 2016 in New Delhi.
Key Features of the agreement
- Detached workers of the two countries exempted from making social security contributions in either countries so long as they were making such contributions in their respective countries.
- Rights and obligations of nationals of both countries have been established. Equal treatment will be provided to nationals.
- Unrestricted payment of pensions will be provided to nationals even in the case of residence in the other contracting state.
- The requirements to be entitled to a pension can be met by aggregating the periods of insurance completed in India and Brazil, whereby each country will only pay pension for the insurance periods covered by its laws.
Comment
Once SSA between Brazil and India is brought into force, it will favourably impact the profitability and competitive position of companies of both countries with foreign operations in either countries by reducing their cost of doing business abroad. It will also help promote more investment flows between the two countries.
Background
So far, India has signed and operationalized Social Security Agreements (SSAs) with 18 countries. They are Australia, Belgium, Austria, Canada, Denmark, Finland, Czech Republic, France, Germany, Japan, Luxembourg, Hungary, Netherlands, Portugal, Sweden, Norway, Switzerland, and South Korea.
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Month: Current Affairs - March, 2017