India, Belgium ink social security pact

India and Belgium have signed a Social Security Agreement – the first bilateral agreement on social security that India has signed – that will serve as a model for similar agreements with other countries in the European Union (EU).

The agreement was signed by Overseas Indian Affairs Minister Vayalar Ravi and Belgian Foreign Minister Karel De Gucht in the presence of Prime Minister Dr. Manmohan Singh and the Belgian Prime Minister Guy Verhofstadt in New Delhi on November 3.

The Ministry of Overseas Indian Affairs is already negotiating similar agreements with countries like The Netherlands and France.

Such agreements would also make Indian companies more competitive since exemption from social security contribution in respect of their employees substantially reduces costs.

The Social Security Agreement negotiated by the Ministry Of Overseas Indian Affairs with Belgium provides for the following benefits to Indians and Belgians working in each other's countries:

· Those working on a short–term contract of up to sixty months are exempted from social security contributions in the host country provided they continue to make social security payments in their home countries.

· Those who live and work for periods longer than sixty months and make social security contributions under the host country laws, will be entitled to the export of social security benefits, should they relocate to the home country on completion of their contract or on retirement.

These benefits will also be available to employees sent by a company to the host country from a third country.

Self–employed Indians in Belgium contributing to the Belgian social security system will be entitled to the export of social security benefits should they choose to relocate to India.

With increasing globalization, rapid growth of the Indian economy, emerging opportunities in the global economy, a large pool of young and technically qualified persons in India and an ageing population in the western world, migration of professionals from India is bound to grow considerably in the foreseeable future.

The bilateral social security agreements become an important instrument to protect the interests of Indian professionals by securing exemption from social security contribution in case of short–term contracts and exportability of benefits in case of relocation, given the social security system extant in most countries.

There are about 7000 Indians working in Belgium in different sectors. Some are self–employed.

The significance of the agreement arises from the fact that the investment by Indian companies in Belgium and the investment by Belgium companies in India has been growing rapidly in recent years.

Indian corporates too have a significant presence in Belgium particularly in the diamond trade and the IT sector.