When a Japanese company sends an employee to India, Japanese pension coverage generally continues for the initial five years under the Japan-India agreement, proved by a Certificate of Coverage. The agreement covers pensions only, so health insurance and employment insurance depend on Japanese rules and on whether the employee stays on the Japanese payroll. Confirm each system with a Japanese social insurance adviser before the assignment.
← Back to the complete guide: How to Set Up a Subsidiary in India from Japan
← Back to India-Japan tax treaty and social security: the complete guide
Key facts
| Pension | Employees' Pension Insurance and National Pension continue under the agreement for the detached worker period |
|---|---|
| Health insurance | Not covered by the agreement; depends on Japanese rules and the employment arrangement |
| Employment insurance | Not covered by the agreement; depends on Japanese rules |
| Proof | Certificate of Coverage from the Japan Pension Service route |
| Who advises | Your Japanese social insurance adviser (sharoshi) or HR team; AU Corporate handles the Indian side |
| Indian side | Provident fund exclusion for certified workers: see EPF for international workers |
Why the Japanese side matters
India's rules only tell you what is due in India. What a Japanese employee keeps in Japan depends on Japanese law and the terms of the assignment. A gap, such as a lapse in pension coverage or health cover, is harder to fix after the person has returned than before they leave.
System by system
| System | During an India assignment | What to confirm |
|---|---|---|
| Employees' Pension Insurance and National Pension | Coverage generally continues for a detached worker for the initial period under the agreement | Certificate of Coverage issued before departure; extension plan |
| Health insurance | Depends on Japanese rules and on whether the employee stays on the Japanese payroll | Continued coverage and the position for family members; cover for treatment in India |
| Employment insurance and workers' accident insurance | Depend on Japanese rules and on who employs the person | Whether the assignment keeps coverage and who bears cost |
| Indian provident fund and ESI | Exempt for certified workers under the pension agreement for provident fund; ESI is outside the agreement | Wage level and ESI applicability in India |
Structuring the assignment
- Keep the employment relationship with the Japanese employer so the detached worker rule applies.
- Recharge the Indian share of the cost through a written intercompany agreement. See transfer pricing.
- Give the Indian payroll a copy of the Certificate of Coverage and diary the expiry date.
- Arrange health cover for treatment in India for the employee and family, because Indian ESI may not fit and the Japanese scheme may not cover local care in full.
- Document the arrangements in the assignment letter.
Extensions and return
The initial five years can be extended where both countries' institutions agree. Apply well before the end. On return to Japan, periods spent in India under the agreement continue to count towards Japanese pension coverage, and Indian periods may be added to meet minimum periods in specified cases. See the agreement.
What this means for a Japanese parent
- Give HR a single checklist covering Japanese pension, health and employment insurance plus the Indian provident fund exclusion.
- Keep the assignment letter, certificate and payroll records together; both Japanese and Indian authorities may ask for them.
Mistakes to avoid
- Assuming the pension agreement covers health insurance.
- Changing the employer of record to the Indian subsidiary without checking social insurance.
- No plan for cover for the employee's family in India.
- Letting the initial period lapse without an extension.
How AU Corporate handles this
We handle the Indian side, including payroll, provident fund and Withholding Tax on salary, and work with your Japanese advisers on the social insurance side.
Related services: HR and payroll
Official sources
Rules on this page can be verified at the primary sources: the Japan Pension Service, the Ministry of Health, Labour and Welfare and the Employees' Provident Fund Organisation.
Frequently asked questions
Does Japanese pension coverage continue in India?
Generally yes for a detached worker for the initial five years, proved by a Certificate of Coverage.
Does the agreement cover Japanese health insurance?
No. The agreement covers pensions. Health insurance depends on Japanese rules and the employment arrangement.
Does the Certificate of Coverage cover family members?
It relates to the worker's pension coverage. Health cover for family members needs separate confirmation.
Who applies for the Certificate of Coverage?
The Japanese employer, through the Japan Pension Service route. Your Japanese social insurance adviser can confirm the current steps.
What if the employee moves onto Indian payroll?
The detached worker rule may no longer apply, and Indian provident fund can apply. Take advice before changing the employer.
Is Indian ESI relevant?
ESI is outside the agreement and applies only below its wage ceiling, so most expats are not covered. Arrange private cover.
Who prepares the Japanese side?
Your Japanese HR team or social insurance adviser. AU Corporate handles the Indian side.
Related guides
The Japan-India Social Security Agreement: Detached Workers, Certificate of Coverage and Totalization
How the Japan-India Social Security Agreement works: detached workers, five-year coverage, Certificate of Coverage, pension systems covered and totalization.
Read the guide →EPF for International Workers in India: What Japanese Expats and Their Employers Must Know
How Indian provident fund applies to foreign nationals: international worker rules, no wage ceiling, the Japan agreement exclusion and the 2026 EPF Scheme.
Read the guide →Japanese Parent Obligations When You Own an Indian Subsidiary
Japanese reporting that follows when you own an Indian subsidiary: CFC rules, dividend exemption, transfer pricing documentation, J-SOX and overseas reporting.
Read the guide →Sending a Japanese Executive to India: Visa, Housing, Banking and Tax
How to relocate a Japanese executive to India: employment visa, FRRO registration, housing, banking, tax residency and permanent establishment risk for the parent.
Read the guide →Sources
Last updated 20 October 2026. General information only, not legal or tax advice. Indian rules change often; confirm current requirements before acting.