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| Sops likely for services sector in Foreign Trade Policy |
| Press Trust of India / New Delhi Jul 31, 2009, 14:50 IST |
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The government is considering extending incentives to the services sector, battling demand recession in Western economies, in the Foreign Trade Policy to be unveiled next month.
The government, which is in talks with all the stakeholders while formulating the policy, has asked the industry to diversify into the African and Latin American markets to insulate its exports.
"We will be discussing again with the services sector, they have made few presentations...We are talking to all stakeholders before we formulate the foreign trade policy for the next five years," Commerce and Industry Minister Anand Sharma told reporters today on the sidelines of a CII function.
"We are talking to the services sector...I am sure it (FTP) will address the short-term challenges (of the sector)," he said, adding the government would help the industry to increase the exports of services.
India's has 2.7 per cent share in the global services market. Industry experts say India has the potential to raise its share in global services export to 4-5 per cent in the next 3-4 years, if developed countries ease visa norms for short-term assignments by professionals. Services exports have been affected due to the ongoing slowdown in the world's major markets including in the US and European countries. The government, the experts say, must give incentives to small and medium players in the sector. India's services exports in 2007-08 was valued at $90 billion.
Sharma said, "there has to be diversification in addition to the traditional destinations and we are advising the industry to explore the emerging markets (and) focus Africa and Latin America in addition to looking at Far East."
The sector has suggested the government to negotiate mutual recognition and totalisation agreements with countries of interest. Under Mutual Recognition Agreement (MRA), two or more countries agree to recognise each other's professional qualifications. The MRAs would address the technical barrier to providing services exports from India to other countries.
Totalisation agreement allow for more equitable treatment of employees and employers on a reciprocal basis.
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