India has once again urged the US to exempt information technology professionals, who go on short-term work visits, from paying social security taxes — an exemption that, if granted, could result in savings of at least a billion dollars for the country's software industry.

Cumulatively, Indian IT professionals on H-1B or L1 visas (staying there for up to six years) pay over $1 billion annually to the US Government in the form of social security taxes, with no benefit or prospect of refund as the social security safety net does not kick-in for ten years. In fact, this issue has been a persistent irritant between the two countries. “India has requested the US to consider a Totalisation Agreement with India,” the External Affairs Minister, Mr S.M. Krishna, said at a joint press conference with the visiting US Secretary of State, Ms Hillary Clinton.

Mr Krishna said India has also conveyed to the US the concerns of IT companies in sending their professionals to execute projects and conduct business in the US. At the meeting with Ms Clinton, Mr Krishna also highlighted that Indian IT companies are contributing to the US economy through investments, employment and supporting US competitiveness.

Bilateral Treaty Talks 

India and the US have also agreed to resume negotiations on a bilateral investment treaty, Mr Krishna said. In many ways, the resumption of talks is an acknowledgement of the enormous potential for further expansion in trade and investment flows in both directions. 

 He also announced that India and the US have increased their engagement in the area of cyber security. “We are pleased with the MoU for cooperation between the Indian Computer Emergency Response Team (CERT-In) and the US CERT,” Mr Krishna said.

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