The Telegraph
Since 1st March, 1999
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Terms set for services deal

New Delhi, May 30: India is ready to better its proposal on opening up services at the WTO talks provided other countries have something good to offer too.

The cabinet committee on WTO, which met here today, asked the commerce ministry to move ahead with improved offers in sectors where initial plans were made in 2003.

Commerce minister Kamal Nath said: “What we ultimately give will depend on what is offered to us. We will wait for the proposals of other countries before we place ours. So far, only Canada and Australia have come forward.”

“While making a fresh offer, India will also be guided by the range and depth of proposals put forward by developed countries insectors of interest to India,” he said.

Nath said India will not formalise 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 to the country’s infotech firms.

Under the general agreement on trade in services, Mode 1 includes cross-border supply of services such as business process outsourcing, while Mode-4 covers movement of workers.

Nath said commitment of developed countries in Modes 1 and 4 is important for the country’s IT sector. This comes against the backdrop of laws, especially in the US, seeking to curb outsourcing and change in visa and immigration procedures.

The sectors in which initial offers were made included business services, construction and related engineering services, health and social services, tourism and travel, maritime and transport services.

On the opening up of retail, legal and accountancy services, Nath said India’s offers in these sectors would be driven by its national interests.

There is mounting pressure on India from the US and other developed countries on throwing open these services to global competition. However, the Left parties have been opposed to this idea.

The government has indicated it is not totally averse to opening up of the branded retail sector as it has tremendous potential for employment generation.

According to the indicative deadline, WTO member-countries are to submit their revised offers on services by May 31. However, the deal on services is linked to negotiations in theareas of agriculture and industrial goods.

“India’s earnings through services exports is estimated at $330 billion. According to the Boston consulting group, this has the potential to increase to $200 billion by 2020, if the developed countries provide better access to their markets. This could take place particularly through improved offers through Mode 1 and Mode 4,” Nath said.

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