India and Belgium on Friday signed a 'landmark' Social Security Agreement, the first ever bilateral agreement on social security India has ever signed aimed at making Indian companies more competitive internationally. Exemption from paying social security contributions for their employees would substantially help reduce costs, while ensuring employees who return can avail of benefits like pension payments.
This agreement, an official release said, will serve as a model for similar agreements with other countries in the European Union. The Ministry of Overseas Indian Affairs is negotiating similar agreements with France and The Netherlands.
The agreement was signed by OIA Minister Vayalar Ravi and Belgian Foreign Minister Karel De Gucht after bilateral delegation level talks, headed by Prime Minister Manmohan Singh and Belgian Premier Guy Verhofstadt.
This agreement would benefit Indians and Belgians working in each others' countries by allowing those working on short-term contracts (up to 60 months) to exempt themselves from paying social security contributions in the host country, as long as they pay them in their home countries. Those who live and work for longer than five years and make social security contributions under host country laws will be able to export those benefits should the employee relocate to the home country on completion of the contract or retirement. Significantly, these benefits would be available to employees sent to the host country from a third country.
According to the spokesman for the External Affairs Ministry, Navtej Sarna, Verhofstadt urged Indian companies to invest in Belgium.