India - Japan Social Security Agreement to come into Force from 01st October 2016

The Agreement on Social Security between India and Japan shall come into force with effect from 1st October 2016. With this addition number of Social Security Agreement (SSA) that would become operational would be sixteen. The Ministry of External Affairs, along with Employees’ Provident Fund Organisation (EPFO) - the competent authority for negotiating and concluding SSAs have completed the

formalities for the Agreement to enter into force. The Social Security Agreement between India and Japan was signed in Tokyo on November 16, 2012. Bilateral Social Security Agreements (SSA) are made with other countries to protect the interests of Indian professionals, skilled workers working abroad. The Government of India till date has signed SSA with 19 countries. The SSAs have been in operation with 15 countries so far. An SSA generally provides for “detachment”, “totalisation” and “portability” of Social Security benefits between agreeing nations. While under Detachment provisions, International Workers are exempted from making contribution in the host country, the Totalisation allows aggregating residency periods of social security contribution made by the Indian worker / professional in India and the foreign country to qualify for retirement benefits. The Portability further allows one to avail benefits in either country

The comprehensive SSA between India and Japan when operational from 1st October 2016 will favourably impact the profitability and competitive position of Indian and Japanese companies with foreign operations in either countries by reducing their cost of doing business abroad. Thousands of Indian and Japanese workers who are working in Japan and India respectively will benefit from the agreement. The SSA will also help more Japanese companies to consider India as a destination for their manufacturing investments. 

Further to this, BRICS Second Employment Working Group meeting is being held in Hyderabad, on 27-28 July 2016. The forum is being planned to impress the BRICS group to adopt a resolution to take the necessary steps to ensure that Social Security Agreements are entered into between the member countries of BRICS. This is all the more because BRICS nations have individually signed SSAs with other nations. Trade relations between BRICS nations have been increasing over the years and major Industries and Enterprises from respective nations are making investments. The companies often make dual contributions in the absence of detachments provisions that affect the competitiveness.