# The India Employee Benefits Stack for Chinese companies

> Chinese parents are used to city-set social insurance rates, a housing fund and economic compensation on termination. India's rates are national, there is no housing fund, gratuity is owed on most exits after five years, and above ₹21,000 a month health cover is the employer's choice, not the state's.

By Akshay Golechha, Chief Business Officer at Plum (https://www.linkedin.com/in/akshaygolechha/). Published by Plum (https://www.plumhq.com). Canonical: https://www.plumhq.com/india-benefits-stack/china. Updated 2026-10-05. Part of The India Employee Benefits Stack: https://www.plumhq.com/india-benefits-stack.

## In short

- There is no equivalent of China's housing fund in India. Pension insurance maps to EPF at 12% employer plus 12% employee on basic plus DA, and medical insurance to ESI below ₹21,000 a month and Group Health Insurance above it.
- Chinese nationals employed in India are International Workers. With no India–China social security agreement, they join EPF from day one on full salary, and can generally withdraw only at 58 or on permanent incapacity.
- India's gratuity resembles China's economic compensation but is also owed on resignation: 15 days' last drawn salary per year of service after five continuous years, capped at ₹20 lakh.

## Questions

### Do Chinese employees seconded to India have to contribute to EPF?

Yes. India and China have no social security agreement, so a Chinese national on Indian payroll is an International Worker who joins EPF from day one, at 12% employer plus 12% employee on full salary with no ₹15,000 ceiling. EPF can generally be withdrawn only at 58 or on permanent incapacity, so build the cost into the posting.

### Is there an Indian equivalent of the housing provident fund (zhùfáng gōngjījīn)?

No. India has no housing fund and nothing to contribute. Housing support is paid as House Rent Allowance, a salary component. Under the Labour Codes in force from 21 November 2025, if allowances excluded from wages exceed 50% of total remuneration, the excess is added back into wages for EPF, gratuity and other statutory calculations.

### Do social insurance rates in India vary by city, as they do in China?

No. EPF is 12% employer plus 12% employee on basic plus DA nationwide, and ESI is 3.25% employer plus 0.75% employee for employees earning up to ₹21,000 a month. What varies by state is leave, under the Shops and Establishments Acts or the Factories Act, and public holidays; there are three national holidays.

### What replaces economic compensation (jīngjì bǔcháng) for Indian employees?

Gratuity. Establishments with 10+ employees owe 15 days' last drawn salary per year of service after five continuous years, or one year for fixed-term employees, capped at ₹20 lakh. Unlike economic compensation it is also owed when the employee resigns or retires, so provision it from the first payroll and insure the liability.

### Does Press Note 3 affect employee benefits?

Not directly. Press Note 3 (2020) requires government approval for investment from countries sharing a land border with India, including China; a 2026 amendment moved non-controlling beneficial ownership of up to 10% to the automatic route. Once the Indian entity is set up, its employees are covered by the same EPF, ESI, gratuity and maternity rules as any other employer's.

### Is group health insurance compulsory in India?

No. Group Health Insurance is not legally required, but candidates hired at ₹8 LPA and above expect it, and most insurers need a minimum group of 7. Above ₹21,000 a month it is the only health cover employees get through work. The employer's premium is deductible under Section 36(1)(ib), is not a perquisite under Section 17(2), and attracts 18% GST.

## What changes when you come from China

### Assignees from China and India's EPF

**The rule.** Foreign nationals employed in India are International Workers under EPF. They must join from day one, with contributions on full salary: the ₹15,000 wage ceiling does not apply.
**China and India.** India and China have no social security agreement. Staff seconded from China to an Indian payroll join EPF from day one on full salary, and can generally withdraw only at 58 or on permanent incapacity. Staying in Chinese social insurance does not exempt them.

### Mapping Chinese benefits to India

**At home.** Pension, medical, unemployment, work-injury and maternity insurance plus the housing fund, at rates set by province or city, often with supplementary commercial medical insurance and an enterprise annuity at larger firms.
**In India.** EPF for pension, ESI or Group Health Insurance (GHI) for health, the Employees' Compensation Act plus Group Personal Accident for injury, and gratuity on exit: fund it through an insured gratuity scheme rather than carrying it as an unfunded liability.

### Overlap between Beijing and India

**Time difference.** Beijing is 2½ hours ahead of India all year (China uses one time zone and neither country uses daylight saving), so most of the Indian working day overlaps China's.
**What to set up.** Agree who in India signs off endorsements, claims escalations and renewals, so nothing waits for headquarters' business hours.

### India–China tax treaty

**Treaty.** India and China have a double taxation avoidance agreement in force since 1994, amended by a protocol in force since 5 June 2019. Short visits are usually exempt from Indian tax under the treaty's 183-day and employer conditions; check the exact article before relying on it.
**Secondments.** Long secondments can create a permanent establishment for the parent. Structure recharges and employment contracts with a tax advisor before staff move.

## What you call it in China, and what it is called in India

There is no housing fund (zhùfáng gōngjījīn) in India, and no city-set contribution rates. China's five insurances and one fund collapse in India into a shorter list with national rates: EPF for pension, ESI for health and injury below ₹21,000 a month, and a statutory gratuity on exit. Above that wage line India has no statutory health cover at all, so the supplementary commercial medical insurance larger Chinese employers buy at home becomes the main layer in India.

| At home in China | In India | What changes for the employer |
| --- | --- | --- |
| Pension insurance (养老保险, Yǎnglǎo bǎoxiǎn): Basic pension: employer 16% and employee 8% of pay in most places, on a base between 60% and 300% of the local average wage. | EPF and EPS (Employees' Provident Fund and Pension Scheme) | 12% employer plus 12% employee on basic plus DA, at the same rate nationwide. The statutory ceiling is ₹15,000 a month, but most MNC subsidiaries contribute on full basic, and International Workers contribute on full salary. |
| Medical insurance (医疗保险, Yīliáo bǎoxiǎn): Basic medical insurance. The employer rate is set locally and employees typically pay 2%; maternity insurance has been merged into it in most places. | ESI for employees earning up to ₹21,000 a month; Group Health Insurance (GHI) for everyone else | ESI is funded at 3.25% by the employer and 0.75% by the employee. Above the ceiling the employer's statutory health obligation is zero; GHI is voluntary in law and expected by candidates hired at ₹8 LPA and above. |
| Unemployment insurance (失业保险, Shīyè bǎoxiǎn): Shared employer and employee contribution, at rates set locally. | No equivalent | Nothing to contribute. Exit costs in India sit in notice pay and gratuity rather than an insurance fund. |
| Work-injury insurance (工伤保险, Gōngshāng bǎoxiǎn): Employer-only contribution, at a rate set by industry risk class. | Employees' Compensation Act 1923 (or ESI where covered) plus Group Personal Accident (GPA) | The Act covers employees not in ESI, and the employer insures it. GPA is the usual add-on, and Group Term Life at 3 to 5 times CTC is common for white-collar staff. |
| Maternity insurance (生育保险, Shēngyù bǎoxiǎn): Pays maternity allowance and childbirth medical costs. National maternity leave is 98 days, and provinces add more. | Maternity Benefit Act: 26 weeks of full pay for the first two children, 12 weeks from the third | Paid by the employer, not an insurance fund (ESI covers it for ESI members). Hospital costs fall on GHI: set the maternity sub-limit against about ₹1 lakh for a normal delivery and ₹1.25 lakh for a C-section. |
| Housing provident fund (住房公积金, Zhùfáng gōngjījīn): Housing savings: employer and employee each contribute 5% to 12% of pay, at a rate the employer picks within the local range. | No equivalent | Nothing to contribute. Housing support in India is a salary component, House Rent Allowance, which counts among the allowances under the Labour Codes' 50% rule. |
| Enterprise annuity (企业年金, Qǐyè niánjīn): Voluntary supplementary pension: employer contributions up to 8% of payroll, and up to 12% combined with employees. | No statutory equivalent; any extra retirement benefit is voluntary | Most MNC subsidiaries already go beyond the statute by paying EPF on full basic rather than on the ₹15,000 ceiling. Anything further is a voluntary benefit. |
| Supplementary commercial medical insurance (补充商业医疗保险, Bǔchōng shāngyè yīliáo bǎoxiǎn): Employer-bought private cover on top of basic medical insurance, common at larger firms. | Group Health Insurance (GHI) | In India this is not a top-up but the main layer for anyone above ₹21,000 a month. The India median sum insured is ₹5,00,000; global startups in India carry ₹10,00,000. Parents are about 40% of claims by relationship in Plum's data. |
| Economic compensation (经济补偿, Jīngjì bǔcháng): Paid when the employer ends the contract for non-fault reasons and on most fixed-term expiries: one month's wage per year of service, capped for high earners. | Gratuity under the Payment of Gratuity Act | Gratuity is owed on resignation and retirement as well as termination, but only after five continuous years (one year for fixed-term employees): 15 days' last drawn salary per year of service, capped at ₹20 lakh. Provision it from day one. |
| Paid annual leave (带薪年休假, Dàixīn niánxiūjià): 5 days after one year of cumulative work, 10 days after 10 years and 15 days after 20 years, counting all employers. | Earned leave under the state Shops and Establishments Act (offices) or the Factories Act (factories) | Earned leave is typically 12 to 18 days a year plus casual and sick leave, and varies by state. Public holidays also vary by state, with three national holidays. |
| Statutory retirement age (法定退休年龄, Fǎdìng tuìxiū niánlíng): Rising gradually from 1 January 2025, over 15 years: from 60 to 63 for men, and to 55 or 58 for women. | Set by company policy | Indian employers set their own retirement age. For Chinese International Workers, EPF can generally be withdrawn only at 58 or on permanent incapacity, so contributions made during a posting stay in India until then. |

## What Chinese companies get wrong when they set up in India

1. **There must be an Indian housing fund to enrol staff in.** There is none. Housing support in India is House Rent Allowance, a salary component. Since 21 November 2025, if allowances excluded from wages exceed 50% of total remuneration, the excess is added back into wages for EPF, gratuity and other statutory calculations.
2. **Contribution rates vary by city, so check with the local bureau.** EPF and ESI rates are national: 12% plus 12% of basic plus DA for EPF, and 3.25% plus 0.75% for ESI. What varies by state is leave, under the Shops and Establishments Acts, and public holidays.
3. **Seconded staff can stay in Chinese social insurance instead.** India and China have no social security agreement. A Chinese national on Indian payroll is an International Worker who joins EPF from day one on full salary, with no ₹15,000 ceiling, and can generally withdraw only at 58 or on permanent incapacity.
4. **An exit payment is owed only when we end the contract.** Gratuity is owed on resignation and retirement too, once five continuous years are complete (one year for fixed-term employees): 15 days' last drawn salary per year, capped at ₹20 lakh. It is statutory, so provision it from the first payroll.
5. **Maternity pay comes from the maternity insurance fund.** In India the employer pays 26 weeks of full pay for the first two children, and 12 weeks from the third. ESI covers it only for ESI members. Group health covers the hospital bill up to a sub-limit; a normal delivery costs about ₹1 lakh.
6. **Basic medical insurance covers everyone; commercial cover is a top-up.** Above ₹21,000 a month India has no statutory health cover. Group Health Insurance is the whole of it, so its sum insured matters: the India median is ₹5,00,000, and global startups in India carry ₹10,00,000.
7. **Annual leave starts at 5 days and grows over decades.** Indian earned leave is typically 12 to 18 days a year under the state Shops and Establishments Acts or the Factories Act, plus separate casual and sick leave, rather than China's 5 days for the first ten years of work.
8. **Parents have their own cover, so leave them out.** Parents are the largest claims category by relationship in India, about 40% of claims in Plum's data. Whether to cover them is the biggest single design choice in a GHI policy, and Indian candidates ask about it.

## China vs India, benefit by benefit

| Benefit | China | India |
| --- | --- | --- |
| Pension | Employer 16%, employee 8% in most places, on a base between 60% and 300% of the local average wage. | EPF and EPS at 12% employer plus 12% employee on basic plus DA, nationwide. |
| Who sets the rates | Provinces and cities set rates and contribution bases. | Rates are national. Leave and public holidays are set by state. |
| Statutory health cover | Basic medical insurance for urban employees, with maternity insurance merged in. | ESI for employees earning up to ₹21,000 a month. Nothing above that line. |
| Supplementary medical | Commercial medical insurance bought by many larger employers. | Group Health Insurance: voluntary in law, and the main layer above the ESI ceiling. |
| Housing | Housing fund: 5% to 12% each from employer and employee. | None. House Rent Allowance is a salary component. |
| Unemployment insurance | Shared contribution at locally set rates. | None. Exit costs sit in notice pay and gratuity. |
| Work injury | Employer-only insurance, priced by industry risk class. | Employees' Compensation Act 1923 for staff not in ESI, insured by the employer; GPA added voluntarily. |
| Exit payment | Economic compensation of one month's wage per year of service on most employer terminations. | Gratuity after five years on most exits: 15 days' last drawn salary per year, capped at ₹20 lakh. |
| Maternity | 98 days nationally, longer in many provinces, funded by maternity insurance. | 26 weeks of full pay for the first two children, 12 from the third, paid by the employer. |
| Annual leave | 5, 10 or 15 days after 1, 10 or 20 years of cumulative work. | Earned leave typically 12 to 18 days a year plus casual and sick leave. |
| Public holidays | 13 days of national public holidays since 2025. | Vary by state; three national holidays. |
| Retirement age | Rising from 2025 to 63 for men and to 55 or 58 for women. | Set by company policy; International Workers generally withdraw EPF only at 58. |

## What headquarters is used to

China's employer costs sit mostly in the mandatory five insurances and housing fund, with commercial medical cover on top at larger firms. In India that order flips: group health is the main layer above ₹21,000 a month, not an extra.

- **1.32 billion+** people covered by China's basic medical, maternity and critical illness insurance
- **70%+** of large enterprises provide supplementary private insurance or enhanced health benefits
- **$420–$840** typical annual premium per employee for supplementary private health insurance
- **RMB 955.8 billion** commercial health insurance premium income in 2024

Source: Benefits Beyond Borders 2025, Plum's report on benefits in the economies investing in India (China chapter, citing the National Healthcare Security Administration and EY). https://www.plumhq.com/benefits-beyond-borders

## Staff seconded from China

Seconded staff may stay on a global or Chinese medical policy, but an India-admitted GHI is still worth adding: it gives cashless admission at network hospitals with no deposit and a local claims process. There is no India–China social security agreement, so a seconded Chinese national on Indian payroll joins EPF from day one on full salary, with no ₹15,000 ceiling, and can generally withdraw only at 58 or on permanent incapacity. Budget that cost into the posting.

## Where Chinese companies set up in India

- **Greater Noida and Noida, Uttar Pradesh.** Vivo, Oppo and Haier plants and the electronics component makers around them. Shop-floor staff here are largely within ESI; supervisors and engineers need GHI.
- **Bengaluru, Karnataka.** Xiaomi's India headquarters and Huawei's research centre. Mostly salaried technology and commercial staff above the ESI ceiling.
- **Pune, Chakan and Ranjangaon, Maharashtra.** Sany's Chakan plant and Haier's Ranjangaon plant in Pune's engineering belt. Pune is one of the seven cities benchmarked in the hub guide.
- **Halol, Gujarat.** SAIC's MG Motor plant, now run by JSW MG Motor India, and its suppliers. Vadodara is the nearest large hospital network.
- **Chennai and Sriperumbudur, Tamil Nadu.** BYD India's operations and the contract electronics belt. Tamil Nadu has its own Shops and Establishments leave rules for office staff.

Chinese companies with operations in India include Xiaomi, Vivo, Oppo, OnePlus, realme, Haier, Midea, BYD, SAIC Motor (JSW MG Motor India), Huawei, Sany, LiuGong.

## Benchmarks: what MNCs and GCCs offer in India

From [The Standard of Employee Benefits 2026–27](https://www.plumhq.com/standard-of-employee-benefits), Plum's report on 15,312 benefit plans, 5,20,100 claims and 74,543 checkups from Plum's FY26 book.

- **1.6×** MNC and GCC benefits spend per employee in India, against a funded Indian startup (nearly 3× a local Indian business). ([source](https://www.plumhq.com/standard-of-employee-benefits#s2-3))
- **43%** of MNCs and GCCs in India are Holistic Leaders: deep insurance plus real breadth of healthcare beside it. ([source](https://www.plumhq.com/standard-of-employee-benefits#s2-3))
- **₹7,50,000** median MNC/GCC sum insured, covering parents or in-laws, with ₹1,00,000 maternity cover and no copays or sub-limits. ([source](https://www.plumhq.com/standard-of-employee-benefits#s2-3))
- **~2%** of payroll buys India's top-quartile plan, against roughly 15% in the US, 10–25% across Europe and 8–15% across APAC. ([source](https://www.plumhq.com/standard-of-employee-benefits#s2-3-coverage))

## Further reading on plumhq.com

- [How MNCs structure health insurance for Indian subsidiaries](https://www.plumhq.com/blog/mnc-health-insurance-india-subsidiary-structure): Global programmes, local policies and who signs what.
- [Do you need to match headquarters' benefits in India?](https://www.plumhq.com/blog/gcc-match-headquarters-benefit-standards-india): Where to mirror the parent plan, and where India needs its own design.
- [Insurance for expatriate employees in India](https://www.plumhq.com/blog/insurance-coverage-expatriate-employees-gcc-india): Covering seconded staff alongside the local plan.
- [Group insurance vs ESI: a guide for employers](https://www.plumhq.com/blog/group-insurance-vs-esi-employers-guide): Who must be in ESI, and where group health insurance takes over.
- [How to calculate gratuity in India](https://www.plumhq.com/blog/how-to-calculate-gratuity): Formulas, worked examples and a free calculator.
- [The Standard of Employee Benefits 2026–27](https://www.plumhq.com/standard-of-employee-benefits): Benchmarks from 4,500+ Indian employee health plans.

Sources: Social Insurance Law of the People's Republic of China; Interim Measures for Foreigners Working in China to Participate in Social Insurance (2011); State Council General Office, Comprehensive Plan for Reducing Social Insurance Rates (2019); NPC Standing Committee, Decision on Gradually Raising the Statutory Retirement Age, in force 1 January 2025; Regulations on Paid Annual Leave for Employees; Special Rules on the Labour Protection of Female Employees; State Council national holiday rules, amended 2024; Labour Contract Law, Article 47; Enterprise Annuity Measures (2018); housing provident fund guidance of the Ministry of Housing and Urban-Rural Development; India–China Double Taxation Avoidance Agreement and 2018 Protocol (incometaxindia.gov.in); DPIIT, Press Note 3 (2020 Series), as amended in 2026; Code on Social Security 2020 and Code on Wages 2019, in force 21 November 2025; Benefits Beyond Borders 2025 (Plum), China chapter.