India Prioritizes Social Security for Overseas Workers in Trade Agreements

India has taken a significant step to protect its professionals working abroad by advocating for the inclusion of social security provisions in all future Free Trade Agreements (FTAs). Spearheaded by the Ministry of Labour and Employment, this initiative reflects India's commitment to ensuring that its overseas workforce and their employers are not subjected to double social security contributions or lose out on benefits accrued during international assignments. This policy shift comes at a crucial time as India negotiates trade deals with major global economies such as the United States, the United Kingdom, and the European Union.

Piyush Goyal is Union Minister of Commerce and Industry | NDTV

Understanding Social Security Agreements

Social Security Agreements (SSAs), sometimes referred to as Social Security Totalisation or Double Contribution Convention Agreements (DCCAs), are bilateral treaties designed to protect workers who move between countries. These agreements primarily aim to prevent the need for workers and employers to pay social security contributions twice—once in the home country and once in the host country. Furthermore, SSAs facilitate the aggregation of work periods in different countries, ensuring workers can qualify for pension and other benefits without losing coverage when moving across borders. This portability is essential for the growing number of Indian professionals who work on international assignments or relocate temporarily.

India currently holds social security agreements with 22 countries, including many in Europe such as Germany, France, Belgium, and Switzerland, as well as other important markets like Canada, Japan, and Australia. However, despite India's large expatriate population in countries like the United States and the United Kingdom, such agreements with these nations have been absent or limited—an issue that India is now actively addressing as part of its trade diplomacy.

Recent Developments and Key Milestones

A landmark achievement in this area is the India–UK Free Trade Agreement, which includes a provision exempting Indian professionals working in the UK from paying into the UK’s National Insurance system for a period of up to three years. This exemption allows workers to maintain their social security coverage within India’s Employees’ Provident Fund Organisation (EPFO), avoiding dual contributions and streamlining benefit accrual. This agreement, while signed, is pending ratification by the UK Parliament.

The Indian government is now pushing to replicate and expand this model with other key partners. Negotiations with the United States are ongoing, with India presenting detailed data on its social security infrastructure to convince American counterparts of the feasibility and benefits of an SSA. Similarly, discussions with the European Union and other countries are anticipated to include social security clauses as a mandatory part of future FTAs. By making social security portability a standard inclusion, India aims to create a more conducive environment for labour mobility and cross-border assignments.

Why the Focus on Social Security Now?

India’s social security system has seen remarkable growth over the past decade. According to the International Labour Organization (ILO), coverage in India has increased from roughly 19 percent in 2015 to over 64 percent by 2025. This expansion not only demonstrates India’s strengthening domestic welfare framework but also enhances the country's negotiating position on the international stage.

Embedding social security protections into trade agreements provides multiple advantages. For Indian workers, it means financial relief as they avoid the burden of paying into two systems simultaneously. It also ensures that contributions made abroad count toward their retirement and other benefits back home, offering continuity and security. For Indian companies, these agreements reduce costs associated with sending employees overseas, making them more competitive in securing international projects.

Furthermore, this approach reflects India’s broader ambition to become a global hub for skilled labour mobility, facilitating the easier movement of talent and promoting economic integration.

Implications for Indian Professionals

For Indian professionals working abroad, the inclusion of social security agreements in trade deals translates into tangible benefits. Exemptions from host-country social security contributions reduce financial strain on employees and their employers. At the same time, the ability to accumulate social security benefits seamlessly across countries removes uncertainties about pension eligibility and health coverage.

Certificates of Coverage (CoCs) issued by the EPFO provide official confirmation that workers are covered by the Indian social security system while posted overseas. This mechanism has been instrumental in enabling Indian expatriates to maintain uninterrupted social security benefits and reinforces India’s commitment to safeguarding its diaspora.

Looking Ahead

While some agreements, such as the India-UK SSA, await formal ratification, others are still in the negotiation phase. The Indian government is working proactively to finalize SSAs with the United States, the European Union, and other countries as part of its comprehensive trade negotiation agenda. Simultaneously, efforts are underway to modernize domestic administrative systems to facilitate efficient management of cross-border social security claims and certification.

This evolution in trade policy highlights India’s strategic use of its strengthened social security system to negotiate better protections for its workers, positioning the country as a responsible and forward-looking global player.

Conclusion

India’s insistence on integrating social security protections for overseas workers within all its FTAs represents a landmark shift in the country’s trade and labour policy. By safeguarding the financial and social welfare interests of its expatriate professionals, India not only enhances their security but also boosts the competitiveness of Indian companies in the international arena. As these agreements take shape and expand, they will play a crucial role in facilitating smoother, fairer, and more efficient global workforce mobility—cementing India’s status as a significant contributor to the global economy.

(Sources: NDTV, Firstpost, Business Line)