India to insist on liberal offers from developed nations

New Delhi, March 23 | Updated: Mar 24 2005, 05:30am hrs
To maximise its bargaining power in the on-going services negotiations at the World Trade Organisation, India has decided to make its offers related to commercial presence of service providers (Mode 3) contingent upon more liberal offers from developed countries in the area of cross-border trade in services (Mode 1) and cross border movement of personnel (Mode 4).

Indias second list of offers for submission to WTO as part of the on-going services negotiations is almost ready and will be placed before the Cabinet for clearance next month, commerce ministry officials told FE. The WTO deadline for submission of a revised list of offers is May 31 and India is going to meet it. The services agreement covers 12 major sectors and 121 sub-sectors. The major sectors included in the agreement are business, communication, finance, health, tourism and travel, telecom and accountancy.

While India, in its first list of offers made in 2002, covered most areas except a few like legal, accountancy and financial services, most of the offers were not made in Mode 3. Developed countries including the EU and the US who have a lot of resources and are interested in establishing commercial presence in other countries, protested hugely and demanded more offers in Mode 3.

India, on the other hand, argued that it had not received enough offers in Mode1 and almost no offers in Mode 4, the two modes of supply it is most interested in.

India is mainly interested in broadening the scope of the fourth mode (Mode 4) of supply of services which deals with movement of natural persons as it has a huge pool of trained personnel. In the Uruguay Round negotiations, commitments on movement of natural persons were very modest and were of limited value because of numerous conditions and qualifications inserted in the text.

The agreement included a number of regulations like economic needs test, processing of visa applications, residency requirements and social security contribution which restricted market access.

India wants that such restrictions should be removed and visa processing should be more lenient to allow more professionals to travel to the West.