Social Security Agreement between India and Brazil

• India and Brazil signed the finalised text of the Social Security Agreement taking forward the spirit of the Goa Declaration at the 8th BRICS Summit.

Highlights of the agreement:

• Under this agreement, detached workers of the two countries are exempted from making social security contributions in either countries so long as they were making such contributions in their respective countries.
• The rights and obligations of nationals of both countries and provides for equal treatment of the nationals of both countries and unrestricted payment of pensions even in the case of residence in the other contracting state (benefits export principle).
• The requirements to be entitled to a pension can be met by aggregating the periods of insurance completed in India and Brazil, whereby each country pays only the pension for the insurance periods covered by its laws.
• India has signed and operationalized Social Security Agreements (SSAs) with 18 countries - Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Hungary, Japan, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, and South Korea.
• The SSA between India and Brazil once brought into force after completion of the ratification process in the respective counties will favorably impact the profitability and competitive position of Indian and Brazilian companies with foreign operations in either countries by reducing their cost of doing business abroad.
• The SSA will also help promote more investment flows between the two countries.
• The SSA between India and Brazil once in force (by early 2018) will also be the first such agreement between the BRICS countries.

Analysis:

• India and Brazil share a very close and multifaceted relationship at bilateral as well as multilateral fora such as IBSA, BRICS, BASIC, G-20, G-4 or the larger multilateral arena such as the UN, WTO, UNESCO, WIPO, etc.
• Bilateral relations between India and Brazil have acquired the dimension of a strategic partnership in the last decade.
• Brazil is one of the most important trading partners of India in the entire LAC (Latin America and Caribbean) region. India-Brazil bilateral trade has increased substantially in the last two decades. However, the global drop in commodity prices and the economic recession in Brazil in 2015 affected Brazil’s overall trade. Evidently, some negative impact was felt in the India- Brazil bilateral trade as well.
• Indian exports to Brazil stood at USD 4.29 billion in 2015 as compared to USD 6.63 billion in 2014 and USD 6.36 billion in 2013.
• Indian imports from Brazil stood at USD 3.62 billion compared to USD 4.789 billion in 2014 and USD 3.13 billion in 2013. Thus the overall bilateral trade was at USD 7.9 billion, decreasing 30.7 percent from USD 11.424 billion in 2014.
• About 39 percent of Indian exports were value added petroleum products such as diesel. The other prominent export items from India were organic chemicals and pharmaceutical products valued at USD 730 Million. Boilers, machinery and mechanical appliances were other major items in India’s export basket. The other important export items included textile products (cotton, apparels, accessories etc.) which amounted to USD 150 million.
   

By: Vishal