India and Germany have ratified a comprehensive Social Security Agreement (SSA) to improve investment flows between the two countries. The agreement was signed in October 2011 and its instruments of ratification were exchanged in February 2017. It will come into force from May 1, 2017.
- The SSA establishes the rights and obligations of nationals of both countries and provides for equal treatment and unrestricted payment of pensions even in case of residence in the other contracting state.
- It also integrate the provisions of the 2008 social insurance pact and is expected to reduce the operational costs of companies on both countries active in either of the countries.
- Under it, requirements to be entitled to pension can be met by aggregating periods of insurance completed in India and Germany, whereby each country only pays pension for insurance periods covered by its laws.
- This comprehensive SSA will favorably impact the profitability and competitive position of Indian and German companies with foreign by reducing their cost of doing business abroad. It will also help promote more investment flows between the two countries.