Opening of services sector betters living standards

Business Standard, December 03, 2007

By Rituparna Bhuyan

India has been unilaterally opening its services sector over the past decade, and the liberalisation in the sector is in the excess of the offers it made in the World Trade Organisation (WTO). Experts say that even though services sector reforms carried out by India have not been reciprocated to a great extent at the international level, but it is helping its citizens access better quality of life.

An analysis of the Indian offers in the Uruguay Round (1994) and the subsequent offers in the Doha Round of world trade talks (2005) in sectors like banking, telecommunication and financial services not only show significant improvement, but also demonstrates that the country has gone the extra mile in carrying out reforms in the sector through policy changes.

However, in terms of reciprocity, other countries have not been so forthcoming. Analysts point that India has huge interests in mode 1 and mode 4 based services which relate to cross border trade (in sectors like business process outsourcing) and movement of professionals.

“Other countries, especially USA, have not shown much flexibility of mode 4 as there are issues of immigration as well as security. In mode 1, though currently there is a relaxed regime, the future is uncertain as there is a lot of political pressure to have in place projectionist policies”, said Pranav Kumar, policy analyst of Consumer Unity & Trust Society (CUTS).

“The reforms carried out in the services sector by India…demonstrate that offers are in unison with our policies of opening up the economy”, said Bipul Chatterjee, deputy executive director of CUTS.