New Delhi: Indian professionals working in Japan on short term contracts of up to six years will no longer require to make any social security contribution in that country if they continue to make such payments in India with the two countries firming up an agreement in this regard.

Similarly, Japanese employees posted in India would enjoy the same benefit under provisions of the Indo-Japan Social Security agreement which will come into force on October 1.

Besides benefiting the professionals in each other’s country, the pact will provide for cooperation in areas of labour market expansion, employment facilitation and orderly migration.

Today, the two countries exchanged ‘Note Verbales’ in as per provision of the pact notifying the completion of the respective constitutional and legal procedures required for coming into force of the pact, the Ministry of External Affairs (MEA) said.

“Thousands of Indian and Japanese workers who are working in Japan and India respectively will benefit from the agreement. The SSA will also help more Japanese companies to consider India as a destination for their manufacturing investments,” it said.

The Social Security Agreement (SSA) between India and Japan was signed in Tokyo on November 16, 2012 and the administrative arrangement for implementation of the pact were exchanged between the two sides on June 9.

The MEA said the agreement will come into force from October 1.

India has already signed SSAs with 15 countries — Belgium, Canada, Czech Republic, Denmark, Finland, France, Hungary, Luxembourg, the Netherlands, Norway, Sweden, Switzerland, South Korea, Austria, and Australia.

The Ministry said once an SSA is signed between India and a foreign country, it exempts the Indian workers on short term contracts abroad from making a social security contribution in that foreign country.

This exemption is provided only if the Indian worker is covered under the social security system of India and continues to pay his or her contribution during the period of overseas contract.

The SSA also enables the Indian professionals to remit accumulated social security contribution made in a foreign country, in case of relocation to either India or a third country.

“The comprehensive SSA between India and Japan when operational from October 1, 2016 will favourably impact the profitability and competitive position of Indian and Japanese companies with foreign operations in either countries by reducing their cost of doing business abroad,” the MEA said.