M'sians in India want intervention on EPF withdrawal

Malaysians employed in India want Putrajaya to ink a social security agreement with New Delhi, to enable them to withdraw their contribution to India's Employees Provident Fund (EPF) as and when they leave the country.

Currently, expatriates working in India, can withdraw their EPF balance only on retirement at 58.

However, Indian citizens are allowed to withdraw the full amount, in cases like change in employment.

"Unlike the expatriates, they need not wait till the retirement age, which is unfair," UE Development India Pvt Ltd's Chief Executive Officer, Gan Chong Shyan said in raising the issue at a roundtable meeting with Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed here.

The EPF contribution by an employee in India is 12 per cent of basic salary and employers makes a matching contribution.

This is becoming an issue for Malaysian companies that plan to invest in India, Scomi Group's Chief Executive Officer, Shah Hakim Zain said.

"For instance if their employment here is up to the age of 38, they need to wait for 20 years to withdraw their contribution. They should able to withdraw the money at some point when they leave," he added.

Gan said on average, Malaysians worked in India for five years only.

It is also understood that accounts that are inactive for more than three years will not earn any interest. EPF savings in India offer a nine per cent interest.

Explaining further, Khazanah India Advisors Pvt Ltd's Director (Investments), Babar Ali Khan said the tighter control is actually targeted at the United States and Europe.

"So, I am sure a mutual agreement between India and Malaysia, would easily solve the problem," he added.

Mustapa, meanwhile, gave an assurance that he would take up the issue once back in Malaysia.

"I will talk to Human Resources Minister, Datuk Seri Dr S.Subramanian, to take it up with his counterpart in India and enable Malaysian workers here to withdraw their EPF savings," he said.

He also said a solution could be worked out, perhaps, on a government-to- government basis.

There are about 2,000 Malaysians working in India.

India has signed social security agreements with Sweden, Belgium, Germany, France, Switzerland, the Netherlands, Luxembourg, Hungary, Denmark, the Czech Republic, Korea, Norway, Finland, Canada and Japan.

Sweden is the latest country India to sign such an the agreement with India.

Among the benefits to Indian nationals working in Sweden is, for a short term contract up to two years, no social contribution would need to be paid under Swedish law by the detached workers, provided they continue to make social security payment in India.

Indian workers will be entitled to the export of the social security benefit if they relocate to India after the completion of their service in Sweden.