Trade Deal Connection
India's trade agreement with the European Union is being strategically linked to the negotiation of social security agreements. This approach involves
tying commitments in the services sector to the establishment of these crucial social security pacts. The aim is to secure agreements with all 12 EU member countries where such pacts do not currently exist. This strategy underscores India's proactive approach to international trade and social welfare.
Social Security Agreements
India is aiming to conclude social security agreements with all EU members within the next five years. These agreements are pivotal for protecting the rights and interests of Indian professionals working in the EU. A successful precedent exists with the United Kingdom, where a similar double-contribution convention was finalized last year. This agreement provides Indian skilled workers in Britain a three-year exemption from social security payments, significantly boosting their financial standing.
UK Pact Success
The social security pact concluded with the UK last year serves as a model for India's ongoing negotiations with the EU. This agreement provides a three-year exemption from social security payments for Indian skilled professionals working in the UK. This exemption is a considerable advantage for these workers, allowing them to retain more of their income. This achievement highlights the benefits of these types of pacts, making them a crucial priority for India's trade strategy.
MFN Forward Clause
India's trade strategy includes the utilization of the Most Favored Nation (MFN) forward clause. Through this clause, India promises to extend any future preferential treatment given to other trade partners in specific service sectors to the EU. This commitment ensures that the EU will benefit from any improved terms of trade India offers to another partner. This mechanism underscores India’s dedication to equitable trade practices, and fosters a collaborative relationship with the EU member nations.
