By NewsGram Staff Writer
One of the few, and serious economic grievances that New Delhi has raised with Washington is the lack of a totalisation agreement on the social security and Medicare taxes contributed by Indian workers to the American coffers.
India has now decided to up the ante on the issue by pressing the US government to sign the agreement. More than 505 signatures have already been signed on an online petition addressed to the External affairs minister, Sushma Swaraj, asking her to strongly take up the issue with the US government.
Currently, non-immigrants and other 300,00 Indians on H1-B visa have to shell out a tonne of money if they are in the US for less than 10 years or 40 quarters. A whopping sum of $25 billion has already been wiped out in the past years owing to the US law.
“Signing the treaty should be on top of the agenda in the US-India Strategic Partnership,” says the petition.
The urgency to take up the issue with US stems from the fact that for the past decade India has been demanding a totalisation agreement, but its call has fallen on deaf ears primarily because the US does not want to lose free money.
The moral argument that India has raised does not raise much hackles in the hard-nosed American politics. No war has ever been won purely on moral grounds. Even the apartheid cookie crumbled due to economic reasons when the South African government was squeezed through divestments via boycott of goods and civil right activism.
Another pressing concern which irked India during the mid-2000s was the exclusion from the club of nuclear countries. But the global scenario prevalent during the time forced George Bush to provide with nuclear superstructure in 2005, a realpolitik gambit aimed at recognising India as its strategic partner, not to mention countering fears of an emerging China.
Things, as they stand today, are different. America no longer has the same compulsions as before. Chinese economy is going through a slowdown and US remains the only bright spot in the world economy.
Therefore, India needs to go back to the drawing room and hatch another plan, a tighter case backed with hard legal arguments. A glimmer of hope had arisen when President Barack Obama in January agreed to pursue an India-US Totalisation agreement.
Still, prospects for signing the deal remain bleak. US has time and again cited technical issues and ‘incompatibility’ of the systems followed by the two countries as the reason for sticking persistently to its stance of non-commitment.
However, here is where the American argument becomes flawed. India has signed at least 9 agreements where the workers are allowed pay into his/her social security if they are employed for less than 5 years. (The Indo-Canada pact is a case in point)
Maybe America needs to come up with a flexible, custom-made treaty such as the one determining wages on the basis of a combination of duration of work and the origins of the employer.
But American commitment to etch a bilateral pact remains questionable.