The Hindu Business Line : Govt likely to reform domestic services sector regulations

REGULATIONS governing various domestic services sectors may undergo changes, with the Commerce Secretary, Mr S.N. Menon, today underscoring the need to reform such regulations for achieving quantum jump in services exports.

Addressing the International Chamber of Commerce (ICC) Commission on Trade and Investment Policy, Mr Menon said that reforms of domestic services sector regulations were necessary in the context of the multilateral trade negotiations on services.

"We have to ensure that each of the domestic service sector and its sub-segments meet certain minimum quality and efficiency levels so that it would be easy for us to enter into agreements such as mutual recognition agreements with other countries," Mr Menon told newspersons here.

At the meeting, Mr Menon also said that the Commerce Ministry has asked other ministries to come up with presentations on regulations administered by them and the changes that could be made by the Government.

The Commerce Secretary also used the occasion to drive home the message that there has to be greater commitment from developed countries in all the four modes of supply of services.

He highlighted that the offer from the US on Mode 4 (movement of natural persons) was "conservative".

"If you want us to be liberal in financial services and telecom services in mode 3 (commercial presence), then we would expect greater parallel movement in modes 1(cross border), 2 (consumption abroad), and 4," Mr Menon said.

On the issue of `investments', which is one of the four Singapore issues, the Commerce Secretary said that India might, in the coming days, look at the issue of "investments" in a different manner as domestic firms have started to make investments abroad.

As regards agriculture, Mr Menon said that there is need for fundamental reforms in agriculture on areas such as infrastructure and cold chains.

"It might take 10-15 years for us. We have backward agricultural markets. Our rules and regulations are archaic.

"We have therefore told our multilateral trading partners that we need more time. We would also not like to trade off agriculture with any other sectors," he said.

Calling upon the developed world to rationalise their subsidies, Mr Menon said that India would reduce tariffs on agricultural imports when these countries eliminated or reduced trade-distorting subsidies and export support in the agricultural sector.

He held that Indian agriculture needed to be protected due to the concerns of food and livelihood security.

"There is no safety net for the agriculture sector. The predominant type of farming in India is subsistence farming," Mr Menon pointed out.