India is likely to pursue its long-pending demand for a totalisation agreement with the US that could help Indian IT companies save an estimated $4 billion in contributions to social security in the US, as both countries prepare to start negotiations on the Bilateral Trade Agreement (BTA) following a meeting of senior officials in Washington DC last week.
New Delhi may also make a case for a more relaxed H1B visa rules that would address concerns around the increase in scrutiny, visa processing delays, and other travel restrictions, sources said.
US Treasury Secretary Scott Bessent said in a media interview on Monday that many top US trading partners had made “very good” proposals to avert reciprocal tariffs, and one of the first deals to be signed may be with India.
“India-US talks on a BTA are going well and New Delhi is ready to bring down some tariff and non-tariff barriers for the American industry as the US seeks to lower its trade deficit. But it also expects some of its own demands to be met,” a source tracking the development told businessline.
While India wants the US to bring down tariffs on some labour-intensive items such as garments and leather, it also wants to push the cause of its services sector.
Focus on visa curbs
“India could pursue a totalisation pact with the US simultaneously with the proposed BTA. Easing of work visa rules could be part of the services discussions of the BTA. Prioritisation, in terms of delivery, is also a call to be taken by the two sides as the BTA is likely to be finalised in multiple tranches,” a source tracking the matter told businessline.
A totalisation or social security agreement would allow short-term workers to avoid contributing to the social security systems of the host country.
Double whammy
In the absence of such an agreement between India and the US, Indian professionals, mostly in the IT sector working for a short-term in the US, end up contributing to social security in both the US and India. They are not able to enjoy the benefits of their contribution in the US as they are not there long enough.
“…it is a good time to start discussions on a totalisation pact that could end up in savings of up to $4 billion in annual social security contributions by Indian IT industry in the US,” the source said.
India is already negotiating a social security agreement with the UK while working on a bilateral Free Trade Agreement and investments pact with the country.
Published on April 28, 2025
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