India firm on services sector as part of WTO deal

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Geneva, Jul 25: of Mexico circulated a report recently asking WTO member countries to come up with five key areas of demands and offers each during the Services Signalling Conference.

India’s major interests are on Mode 1 and Mode 4 of the General Agreement on Trade in Services. Mode 1 that is officially known as cross-border trade, refers to services supplied from one country to another -eg. BPOs or international telephone calls, while mode 4 in official jargon is presence of natural persons and is regarding individuals like consultants or software professionals travelling from their own country to another nation to supply services.

However, the US and the EU are yet to make any major concessions in these two aspects. Developed countries had indicated that only if they get market access in developing nations for their agriculture and industrial goods, they would in return open their services markets for the developing nations.

India was upset over the draft report of services that was released on May 27 as it did not offer much on Mode 1 and 4.

Services exports accounts for 40% of India’s total exports of goods and services. In 2007-08, India’s services exports were worth $86 billion in 2007-08. The services sector comprises around 55% of the country’s GDP and provides employment to around 142 million people, which is 28% of India’s workforce.

Among the sectors that India is demanding significant market access in the developed country markets are IT and IT-enabled services, telecommunication, construction, engineering, health, R&D. However, due to restrictive domestic regulations in the developed countries, Indian professionals in these fields have been finding it difficult to get short-term visas to offer their services in those countries.