India to pitch for trade facilitation pact in services at WTO

New Delhi: India will pitch for a trade facilitation agreement (TFA) in services at the WTO and other bilateral free trade pacts as the sector has huge potential and it contributes significantly in the country's economy.

India is already pushing hard for a comprehensive trade pact in the services sector, a key area of interest for the country, in the ongoing free trade agreement negotiations including with the European Union and Regional Regional Comprehensive Economic Partnership (RCEP).

"After doing TFA in goods at the World Trade Organization, we do intend to take TFA in services to the WTO," a senior Commerce Ministry official said.

TFA in services means liberalised visa regime such as multiple entry visas, visa-free travel for foreign tourists and long term visas for business community.

"We want to steer the debate here on this issue because the future trade will happen in services. Mode 4 (movement of professionals) is very important," the official said.

The Commerce Ministry is holding consultations with stakeholders on the matter and several experts and industry people are in favour of such agreements.

"In RCEP negotiations too we have clearly stated that India wants a comprehensive agreement in goods, services and investments. India has decided that it would be now aggressive in demanding freer movement of people because it is in the interest of India and the world," said the official.

India is very strong in the services area as the sector contributes over 50 percent in the country's economic growth.

To boost services exports, the ministry is already working on some reform measures in sectors including education and legal.

Last year, it had organised a global exhibition on services. At the WTO's ministerial meeting held recently in Nairobi, Commerce and Industry Minister Nirmala Sitharaman had said that services sector is important for developing countries for growth as well as job creation.

She had stated that the liberalisation of services trade, particularly in Modes 1 and 4, needs to figure high on the development agenda in the WTO.

"A special initiative on services sector is needed. To achieve this, it is imperative to put in place a simple and transparent regulatory framework that encourages growth in the services sectors," she had said.

The Mode 1 negotiations pertain to business process outsourcing, which are generally known as cross-border services like doctors providing consultation to a patient in the US sitting in India through e-mail.

Under this, India wanted these services to be totally liberalised so that there were no restrictions on carrying them out.

Under Mode 4 negotiations, which provides for movement of natural persons, India has been demanding that the bound rate for granting visas for professionals should be substantially increased.