Employees on German contracts are obliged to participate in the German social security system, while ICT employees are exempted but can choose it as an option.
Once in the system, both employee types can apply for an exception from the obligation to bay pension fund contributions, which include unemployment insurance make out ca. 20 % of the gross salary.
So instead of paying German pension fund and unemployment contributions, the CoC could be used to pay Indian pension fund contributions instead during the time in Germany.
As a consequence, the German payroll would only be linked to health insurance and long-term care insurance, which however provide full heal insurance coverage to the employee and his family members.
From a practical perspective, a typical (and good) set up would be to stop the Indian salary in a way, that it would be put on hold and then pay out the full salary in Germany, option for German contributions social contributions.
However, a CoC application will be filed, which will the help to bring the contributions down to health and long-term case contribution only. The pension fund contributions will be paid in India, where the amounts are significantly lower.
This would then ensure the tax payments in Germany and at the same time provide the employee with full health insurance coverage.