India and Japan are going to re-open discussions on liberalisation of movement of professionals, an issue that has long stalled any significant progress in the conclusion of the free trade agreement (FTA) between the two countries.
A delegation of trade officials from Tokyo are going to visit the capital on Tuesday and would hold discussions with their Indian counterparts on services. On top of India?s agenda would be the demand to allow Indian working professionals like doctors, nurses, lawyers and engineers to practice in Japan. Known as the mode 4 in trade parlance, India has been pushing for its liberalisation with every country with whom India is negotiating a trade agreement. So far only Singapore and South Korea have allowed Indian professionals to work in their countries albeit with caveats.
According to a commerce ministry official, who did not wish to be named, Japan has shown interest in allowing Indian working professionals. ?We have shown Japan that so far in India mode 4 is largely liberalised?we hope that they allow Indians as well to practice there,? he said.
On Tuesday India would also be pushing for liberalisation in mode 1 i.e. outsourcing, an area that has not been opened up by Japan either. ?India?s strength lies in its services sector and any opening up of this area is going to benefit the domestic IT industry to a large extent,? a government source added.
Head of trade policy at industry chamber CII Pritam Banerjee said that owing to the language difficulties in Japan, it has not emerged as an important IT destination for Indian exports. But he said if any breakthrough is achieved in the FTA it could open up a world of opportunity for India. ?Mode 4 (movement of professionals) is the key for India. If it gets approved then not only will movement of professionals become far easier but India would be able to push its IT exports as well in that part of the world,? he said. Banerjee was referring to how a large chunk of Japanese companies would want to outsource work to India to cut costs and improve efficiency if mode 1 and 4 is liberalised.
He also said that India should push for liberalisation of the movement of nurses owing to the vast ageing potential of Japan. ?This holds a big potential for India?currently Japan has an agreement with Indonesia for movement of nurses,? Banerjee said. India and Japan are looking to conclude the FTA by December 2010-end when Prime Minister Manmohan Singh is slated to visit Tokyo. The talks for an FTA started in 2007 under former commerce minister Kamal Nath. However, talks made little progress as Japan demanded for an agreement on government purchases while India pushed for greater market access for its pharmaceutical products. Currently total trade between India and Japan is around $ 11 billion. India imports worth $ 8 billion and exports are valued at only $ 3 billion.