India and Germany on Friday ratified a comprehensive Social Security Agreement (SSA), to come into effect from May, to improve investment flows between the two countries, an official here said.
The agreement, signed on October 12, 2011, and of which instruments of ratification were exchanged on Friday, is expected to reduce the operational costs of Indian and German companies operating in either of the countries.
"The agreement establishes the rights and obligations of nationals of both countries and provides for their equal treatment and unrestricted payment of pensions even in case of residence in the other contracting state (benefits export principle)," an official release of the Ministry of External Affairs said.
"The requirements to be entitled to a pension can be met by aggregating the periods of insurance completed in India and Germany, whereby each country pays only the pension for the insurance periods covered by its laws. The period of posting will be up to 48 calendar months," it added.
The two countries signed an Agreement on Social Insurance on October 8, 2008, which came into force on October 1, 2009.
As per the Agreement, detached workers of the two countries were exempted from making social security contributions in either country, in case they made such contributions in their native countries.
Subsequently, on October 12, 2011, the two countries signed a comprehensive Agreement on Social Security, which included totalisation of social benefits.
Till date, India has signed and operationalised similar agreements with 18 countries, including Australia, Canada, France, Germany and Japan.