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India to wait before opening up services

Last updated on: May 30, 2005 13:40 IST
India on Monday decided to adopt a wait-and-watch approach on making its offers to the World Trade Organisation on opening up its services sector but said liberalisation of retail, legal and accountancy services will be solely driven by national interests.

"The cabinet committee on WTO discussed the issue. We will await the offers and requests of other countries before we make our offer. So far, only Canada and Australia have made their offers," Commerce Minister Kamal Nath said.

On opening up of retail, legal and accountancy services, which is being opposed by the Left parties, Nath said India's offers in these sectors would be driven by its national interests.

The government has already indicated it is not totally averse to opening up of retail sector as it has tremendous potential for employment generation besides helping the fledgling food processing sector and boosting exports.

As per the indicative deadline, WTO member countries are to submit their revised offers on services by May 31 but opening up of services is linked to the ongoing negotiations in other crucial areas of agriculture and industrial goods.

The further movement in the Doha development round depends on simultaneous progress in all the three sectors as member countries want to use it as a strategy to make more gains in areas of their interest.

Nath said India would not bind its existing policy framework at WTO if it does not get "satisfactory reciprocal offers" from developed countries, especially in Mode 1 and 4, which are crucial for the country's IT sector.

Under General Agreement on Trade in Services, supply of services is divided into four modes. Mode 1 is for cross border supply of services (like business process outsourcing), Mode 2 is for consumption abroad, Mode 3 is for investment abroad and Mode 4 is for movement of natural persons.

Nath said commitment of developed countries in Modes 1 and 4 is important for the country's IT sector in the wake of various legislations, especially in the US, seeking to curb outsourcing and change in visa and immigration procedures.

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