Global Services-22!23!24 Prof. Tarun Das

8/9/2019 Global Services-22!23!24 Prof. Tarun Das

http://slidepdf.com/reader/full/global-services-222324-prof-tarun-das 1/60

Global Services- Lectures 22-23-24Impact of Globalization and WTO-

GATS on the Indian EconomyProf. Tarun Das, IILM, New India.Formerly, Economic Adviser, Ministry of Finance



Dr. Tarun Das 2

Contents

I. What do we mean by globalisation?

II. Reforms and Extent of Globalisation

III. Macro Economic Impact

1. Sustained Economic Growth2. Improvement in External Sector

IV. Strengths, challenges and Prospects1. Strengths

2. Constraints3. Prospects



Dr. Tarun Das 3

1.1 Globalisation means

Worldwide intensive exchange of people,knowledge, capital, goods and services.

Globalisation helps in integration of theworld, and allows new ideas andtechnological innovation to spread around theglobe.

Globalisation is much wider than aneconomic process and involves all humanrelationships and civilizations.



Dr. Tarun Das 4

II. Reforms and Extent of Globalisation In India



Dr. Tarun Das 5

2.1 Economic Reforms in India

Since July 1991 India has initiated wide-ranging reforms in trade, industry,financial and public sectors.

To improve efficiency, productivity and

international competitiveness of Indianindustries and to impart dynamism tooverall growth process.

Emphasis is on so-called LPG(liberalisation, privatisation andglobalisation).



Dr. Tarun Das 6

2.2 Basic Characteristics of Reforms

Gradual, Step by Step and Evolutionary Appr oach, not a Big Bang, Shock Therapy

or Revolutionary Appr oach

Gener al political consensus

Strong emphasis on ³human face´

Government owns the reforms

No backtracking of reforms

No write-off / rescheduling of external debtPractically no sacrifice made by people



Dr. Tarun Das 7

2.3 Major Reforms for Globalisation

Indian Rupee is fully convertible on current

account, and almost fully convertible for foreign residents.

Market determined exchange rate

Abolition of licenses for foreign trade

Liberal regime for foreign investment andtechnology transfer

Gradual reduction of customs duties

Removal of foreign exchange control

Liberal policy for external commercialborrowing and outward investment

Liberalisation of financial and capital markets



Dr. Tarun Das 8

2.4-A Extent of Globalisation

Average GR in 1990-2002 (%)

Indicators India China

Overall GDP 5.9 10.0

Exports volume 2.6 10.6

Imports volume 4.7 9.2

Exports value 9.5 14.5

Imports value 10.1 12.6

Trade (exports+imports) 10.0 14.0



Dr. Tarun

Das 9

2.4B.Globalisation Extent(% of GDP)

Indicators India

1990 2003

China

1990 2003

Merchandise trade

Services trade

15 24

3 16

20 4512 23

Trade of goods & services 18 40 32 68

Private capital inflows 0.6 3.1 2.5 10.4

Foreign direct investment 0.1 0.5 1.1 5.0Official dev. assistance 0.4 0.4 0.6 0.1

External debt 29 18 17 13



Dr. Tarun

Das 10

2.4-C Extent of Globalisation

Indicators India

1990 2003

China

1990 2003Mean tariff rate (%)

All productsPrimary productsManufactured products

79.0 30.9

56.2 28.279.9 30.6

41.2 15.3

32.5 14.341.6 15.0Share in world exports (%) 0.8 0.8 3.0 6.2

Inbound tourists (million) 1.7 3 5 36

Outbound tourists (million 2.3 4 2 12

Tourist earnings ($billion) 1.5 3 2.2 20



Dr. Tarun

Das 11

2.4-D Extent of GlobalisationTransport in 2001

Indicators India China

Ports traffic (Million TEUs) 2.6 44

Air flight departures (000) 214 841

Air passengers (million) 17.3 72.7

Air freight (billion tkm) 0.5 4.2



Dr. Tarun

Das 12

2.5 Mean Tariff Rates & NTBs

Country Mean Tariff Meantariff NTB (% in allCountry 1990 2000 tariff lines)

India 93.6 28.0 5.2

China 46.5 18.5 11.2Indonesia 27.4 14.3 2.0

S. Korea 17.8 7.0 n.a.

Malaysia 14.4 9.4 2.4Sri Lanka 22.2 19.8 4.0

Thailand 42.4 43.7 4.2



Dr. Tarun

Das 13

3.1 India emerged as one of the fastest growing economies

in 1990-2001

6.2 6.0 5.9

10.0

7.7

7.46.7

6.5

6.36.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

C h i n a

r e l a n

d

M y a n m a

r

U g a n d a

M o z a m b i q u

e

M a l a y

s i a C h i l e

L i b e r i a

D o m . R e

p n d i a

Country

A v e r a g e g r o w t h r a t

e i n 1 9 9 0 s ( %

)



Dr. Tarun

Das 14

3.2 India moved on a higher growth path(Real GDP growth rate in per cent)

5.6

1.3

5.9

7.8

5.8

4.0

8.5

7.5

8.5

4.8

4.4

6.16.5

7.37.3

5.1

0

1

2

3

4

5

6

7

8

9

1 9 9 0

- 9 1

1 9 9 1

- 9 2

1 9 9 2

- 9 3

1 9 9 3

- 9 4

1 9 9 4

- 9 5

1 9 9 5

- 9 6

1 9 9 6

- 9 7

1 9 9 7

- 9 8

1 9 9 8

- 9 9

1 9 9 9

- 0 0

2 0 0 0

- 0 1

2 0 0 1

- 0 2

2 0 0 2

- 0 3

2 0 0 3

- 0 4

2 0 0 4

- 0 5

2 0 0 5

- 0 6



Dr. Tarun

Das 15

3.3 Recovery in Industry(Production growth rate in per cent)

0.6

2.3

8.59.1

6.16.7

4.1

6.7

5.0

2.7

5.7

7

8.4 8.1

13.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1 9 9 1

- 9 2

1 9 9 2

- 9 3

1 9 9 3

- 9 4

1 9 9 4

- 9 5

1 9 9 5

- 9 6

1 9 9 6

- 9 7

1 9 9 7

- 9 8

1 9 9 8

- 9 9

1 9 9 9

- 0 0

2 0 0 0

- 0 1

2 0 0 1

- 0 2

2 0 0 2

- 0 3

2 0 0 3

- 0 4

2 0 0

4 - 0 5

2 0 0 5

- 0 6

%



Dr. Tarun

Das 16

3.4 Sectoral growth rates in India (%)Sectors 1980-90 1992-2000 2002-05 A griculture 3.1 3.3 1.2

Industry 7.2 6.5 7.0Mining 7.7 4.0 6.9Manufacturing 7.4 5.9 7.4Utilities 8.9 5.7 4.4Construction 4.6 8.2 6.7Services 6.5 8.3 8.6

Trade,hotels 6.2 8.5 9.4Trans & Telecom 5.8 7.4 13.6

Financial services 9.4 8.8 7.6

Social,personal 6.0 7.4 5.2

All Sectors 5.5 6.4 6.5



Dr. Tarun

Das 17

3.5 Sectoral shares in India (% in GDP)Sectors 1993-94 2004-05 2005-06 A griculture 32.9 20.8 19.9

Industry 23.9 19.5 19.3Mining 2.1 2.2 2.0Manufacturing 14.9 15.1 15.1Utilities 1.3 2.2 2.2

Services 48.8 59.7 60.7Construction 5.6 6.5 6.7Trade,hotels 13.8 15.5 16.1Trans & Telecom 5.4 10.0 10.1Financial services 11.5 13.4 13.5Social 12.5 14.3 14.3 All Sectors 100.0 100.0 100.0



Dr. Tarun

Das 18

3.6 Trend of GDS as % of GDP

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

1990-

91

1991-

92

1992-

93

1993-

94

1994-

95

1995-

96

1996-

97

1997-

98

1998-

99

1999-

00

2000-

01

2001-

02

2002-

03

2003-

04

R a t i o t o

D P (

)

Household Pvt.Corp Public Total



Dr. Tarun Das 19

3.7 Trend of GDI as % of GDP

0.0

10.0

20.0

30.0

1 3 5 7 9 1 1

1 3

Years since 1990-91

A s % o

f G D P

Pvt.Corp

Public

Total



Dr. Tarun Das 20

3.8 Trends of Inflation (%) andGR of Broad Money (M3)

0

5

10

15

20

25

1 3 5 7 9 1 1 1 3 1 5

Years since 1990-91

G r o w t h R a

t e ( % )

CPI

WPI

M3



Dr. Tarun Das 21

3.9 Employment growth rate in India (%)

Sectors 1983-1993 1993-2000 A griculture 2.2 0.0

Mining 3.7 -1.9Manufacturing 2.3 2.6

Utilities 5.3 -3.6

Construction 4.2 5.2

Trade 3.8 5.7Trans & Telecom 3.4 5.5Financial 4.

65.4Social 3.6 -2.1

All Sector 2.7 1.1



22

3.10 Sectoral Employment as % of TotalSectors 1983 1993-94 1999-2000

A griculture

63.

2

60.4 5

6.7Industry 15.6 15.9 17.5

Mining 0.7 0.8 0.7Manufac. 11.6 11.1 12.1

Utilities 0.3 0.5 0.3Construction 3.0 3.5 4.4Services 21.2 23.7 25.8Trade,hotels 7.6 8.3 11.1

Trans/Telecom 2.9 3.2 4.1Fin. services 0.9 1.1 1.4Social/per 9.8 11.1 9.2

All Sectors 100.0 100.0 100.0



Dr. Tarun Das 23

3.11 Composition of sectoral GDI (%)

1990-91 2002-03

A. Agri l r & alli 8.4 8.9

B. Industr 53.0 46.9

C. Ser i es 38.5 44.2 --Tr ade, hotels 3.9 0.6

--Tr anspor t, comm. 11.7 10.8

--Finacial sector s 14.4 13.6

-- Govt, social 8.5 19.2

D. Total GDI 100.0 100.0



Dr. Tarun Das 24

3.12 Sectoral GDI as percentage of GDP

1990-91 1995-96 2002-03

A.Agriculture 2.4 1.7 2.1

B.Industry 12.1 16.1 10.9

C.Services 9.6 9 10.3

6. Trade, hotels 1 0.8 0.17. Transport & comm. 2.9 2.8 2.5

8. Finacial sectors 3.6 3.4 3.2

9. Govt., social 2.1 2 4.5

10. Total GCF 23.1 26.8 23.3



Dr. Tarun Das 25

3.13 Industrial Growth Ratesby Broad Sectors

Sectors 2002-03 2003-04 2005-06

(Weight)

Mining (10.5) 5.8 5.2 0.9

Manuf (79.4) 6.0 7.4 9.1

Elect (10.2) 3.2 5.1 5.2

OVERALL (100) 5.7 7.0 8.1



Dr. Tarun Das 26

3.14 Industrial Growth Rates

By Use-based ClassificationSectors 2002-03 2003-04 2005-06

[Weight]

Basic (35.6) 4.9 5.4 6.7Capital (9.3) 10.5 13.6 15.7

Intermed. (26.5) 3.9 6.4 2.3

Consumer(28.7) 7.1 7.1 12.0-Durables (5.4) -6.3 11.8 15.2

-Non-dur (23.3) 12.0 5.8 11.0



Dr. Tarun Das 27

3.15 GR of Infrastructure sectors

Sectors 2002-03 2003-04 2004-05 2005-06

Rail Traffic 5.3 7.5 8.0 9.5

Ports cargo 9.0 10.0 11.3 11.7

Cell phones 21.5 115.1 10.4 38.4 Air-Exp cargo 13.3 1.0 12.6 15.5

Air-Imp cargo 18.6 13.4 24.4 12.3

Air-Int.P

ass 4.8 6.5 14.0 12.8 Air-Dom.Pass 9.6 13.1 23.6 22.5

Highways Up, .. -16.6 161 -5.9



Dr. Tarun Das 28

3.16 Average Growth rates in India(per cent)

Decade Services Servicesexports imports

1950s 4.5 1.9

1960s 0.0 1.11970s 22.7 17.6

1980s 4.4 8.8

1990s 17.7 17.0



Dr. Tarun Das 29

3.17 Composition of service exportsof India (per cent)

Period Travel Trans Insurance Govt Misc1950s 8.6 32.9 7.7 23.4 27.31960s 10.5 34.6 5.2 29.7 19.91970s 25.5 37.3 4.7 10.8 21.81980s 5.9 17.1 2.4 3.1 41.11990s 33.0 20.3 2.3 1.8 42.6

2000-01 21.5 12.6 1.7 4.0 60.32005-06 12.9 10.4 1.7 0.5 74.5

Note: Misc includes business, professional,financial, software and other modern services.



Dr. Tarun Das 30

3.18 Composition of service importsof India (per cent)

Period Travel Trans Insurance Govt Misc1950s 18.3 22.6 6.7 22.6 29.81960s 9.5 29.5 2.4 16.9 39.01970s 7.5 36.9 1.1 9.4 40.8

1980s 11.8 31.5 0.5 4.2 49.61990s 14.6 30.6 0.3 2.7 49.82005-06 12.7 14.6 1.9 0.9 69.9Note: Misc includes business, financial, software

and other modern services.



Dr. Tarun Das 31

3.19 Impact on Financial Sectors

Item Mar-96 Mar-98 Mar-06

1.No.of foreign banks 33 42 292.New private banks 9 9 8

3.Gross NP A ratio 24.8 16.0 3.2

4.Net NP A s ratio 10.7 8.2 1.0

5.Op. profits ratio 1.6 1.8 2.16.Net profits ratio 0.2 0.8 0.9

7.CR A R (Cap.adequacy ratio) No. of Banks

-- Below 9% 316

3-- 9 to 10% 10 16 3

-- A bove 10% 43 71 79

8.Number of banks 84 93 85

.



Dr. Tarun Das 32

3.20 Impr ovement inHuman Development

Poverty ratio declined:

from 39% in 1987-88 to 36% in 1993-94,further to 26% in 1999-2000.

Infant Mortality rate declined:from 94 in 1988 to 70 in 2001

Literacy rate improved:

from 52% in 1991 to 65% in 2001

Real wages for farm labour had anincreasing trend in 1990s.



Dr. Tarun Das 33

4 Significant Improvement

in External Sector



Dr. Tarun Das 34

4.1 Manageable Curr ent AccountBalance on Exter nal Sector (as % of GDP)

-3.1

-0.3

-1.7

-0.4

-1.0

-1.7

-1.2-1.4

-1.0 -1.0

-0.5

0.7

1.2

2.3

-0.8

-1.3

-4

-3

-2

-1

0

1

2

3

1 9 9 0

- 9 1

1 9 9 1

- 9 2

1 9 9 2

- 9 3

1 9 9 3

- 9 4

1 9 9 4

- 9 5

1 9 9 5

- 9 6

1 9 9 6

- 9 7

1 9 9 7

- 9 8

1 9 9 8

- 9 9

1 9 9 9

- 0 0

2 0 0 0

- 0 1

2 0 0 1

- 0 2

2 0 0 2

- 0 3

2 0 0 3

- 0 4

2 0 0 4

- 0 5

2 0 0 5

- 0 6



Dr. Tarun Das 35

4.2 Acceleration inExport Growth Rate

9.0

-1.5

3.8

2018.4

20.8

5.3 4.6

-5.1

10.8

21

-1.6

20.321.1

23.9

27.5

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

1 9 9 0

- 9 1

1 9 9 1 - 9 2

1 9 9 2

- 9 3

1 9 9 3

- 9 4

1 9 9 4

- 9 5

1 9 9 5

- 9 6

1 9 9 6

- 9 7

1 9 9 7 -

9 8

1 9 9 8

- 9 9

1 9 9 9

- 0 0

2 0 0 0

- 0 1

2 0 0 1 - 0 2

2 0 0 2

- 0 3

2 0 0 3

- 0 4

2 0 0 4

- 0 5

2 0 0 5

- 0 6

.



Dr. Tarun Das 36

4.3 Steady Increase inExport/GD P ratios (per cent)

5.8

6.97.3

8.3 8.39.1 8.9 8.7

8.3 8.4

9.99.4

10.6 10.8

11.8

13.1

0

2

4

6

8

10

12

14

1 9 9 0

- 9 1

1 9 9 1

- 9 2

1 9 9 2

- 9 3

1 9 9 3

- 9 4

1 9 9 4

- 9 5

1 9 9 5

- 9 6

1 9 9 6

- 9 7

1 9 9 7

- 9 8

1 9 9 8

- 9 9

1 9 9 9

- 0 0

2 0 0 0

- 0 1

2 0 0 1

- 0 2

2 0 0 2

- 0 3

2 0 0 3

- 0 4

2 0 0 4

- 0 5

2 0 0 5

- 0 6

i n

U S

$

b i l l i o n



Dr. Tarun Das 37

4.4 Stability inExport/Import ratios

66.2

86.7

77.6

84.8

74.8 7469.7 69.7 72.1

67.8

78 7983 81

69 67

0

10

20

30

4050

60

70

80

90100

1 9 9 0

- 9 1

1 9 9 2

- 9 3

1 9 9 4

- 9 5

1 9 9 6

- 9 7

1 9 9 8

- 9 9

2 0 0 0

- 0 1

2 0 0 2

- 0 3

2 0 0 4

- 0 5

i n

U S

$

b i l l i o n



Dr. Tarun Das 38

4.5 Steady Incr ease inImpor t/GDP Ratios (per cent)

8.87.9

9.6

11.112.3 12.7 12.5 12.5

11.512.4 12.7

11.812.8 13.3

17.1

19.6

0

5

10

15

20

25

1 9 9 0

- 9 1

1 9 9 1

- 9 2

1 9 9 2

- 9 3

1 9 9 3

- 9 4

1 9 9 4

- 9 5

1 9 9 5

- 9 6

1 9 9 6

- 9 7

1 9 9 7

- 9 8

1 9 9 8

- 9 9

1 9 9 9

- 0 0

2 0 0 0

- 0 1

2 0 0 1

- 0 2

2 0 0 2

- 0 3

2 0 0 3

- 0 4

2 0 0 4

- 0 5

2 0 0 5

- 0 6

i n

U S

$

b i l l i o n



Dr. Tarun Das 39

4.6 Significant Impr ovement inInvisibles/GDP Ratios (per cent)

-0.1

0.7 0.6

1.1

1.81.6

2.72.4

2.2

3

2.2

3.13.3

4.34.5

5.1

-1

0

1

2

3

5

1 0 -

1

1 1 -

2

1 2 -

3

1 3 -

1

-5

1 5 -

1

-7

1 7 -

1

-

1

- 0 0

2 0 0 0

- 0 1

2 0 0 1

- 0 2

2 0 0 2

- 0 3

2 0 0 3

- 0

2 0 0

- 0 5

2 0 0 5

- 0

i n

U S

$

b i l l i o

n



Dr. Tarun Das 40

4.7 Substantial incr ease in For eignInvestment Inflows (US$ billion)

0.1 0.10.6

4.25.1 4.9

6.05.4

2.3

5.15.9

6.7

4.6

14.8

12.5

18.2

-5

0

5

10

15

20

1 9 9 0 - 9 1

1 9 9 1 - 9 2

1 9 9 2

- 9 3

1 9 9 3

- 9 4

1 9 9 4

- 9 5

1 9 9 5

- 9 6

1 9 9 6 - 9 7

1 9 9 7 -

9 8

1 9 9 8

- 9 9

1 9 9 9

- 0 0

2 0 0 0 - 0 1

2 0 0 1 - 0 2

2 0 0 2

- 0 3

2 0 0 3

- 0 4

2 0 0 4

- 0 5

2 0 0 5

- 0 6

i n

U S $

b i l l i o n



Dr. Tarun Das 41

4.8 FDI Outstanding (%)

Sectors Aug 1991 Aug 20031. Plantation & agriculture 9.5 1.42. Mining 0.3 0.1

3. Power 0.1 16.54. Manufacturing 84.9 50.4

5. Services 5.2 32.4a)Financial & real estate na 6.4b)Telecommunications na 19.8

c) Transport na 1.9

d)Hotels and retail trade na 2.7

e)Others na 1.6Total 100 100



Dr. Tarun Das 42

4.9 Significant r eduction in Exter nalDebt Ser vice Ratio (at end Mar ch)

(% of gr oss curr ent r eceipts)

35.3

30.2

27.525.4 25.9 26.2

23.0

19.5 18.817.1 16.2

13.4

15.8

5.9

9.7

05

10

15

20

25

30

35

40

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6



Dr. Tarun Das 43

4.10 Reduction in Concessional to TotalExter nal Debt Ratio (end Mar ch)

45.9 44.8 44.5 44.4 45.3 4542.3

39.5 38.5 38.9

35.5 36.0 36.8 36.4 35.5 34.5

05

10

15

20

2530

35

40

45

50

1 9 9 1

1 9 9 3

1 9 9 5

1 9 9 7

1 9 9 9

2 0 0 1

2 0 0 3

2 0 0 5



Dr. Tarun Das 44

3.0

3.2

2.7

1.3 1.31.4

1.8

1.3

1.00.9

0.8

0.6

0.9

0.7 0.65 0.6

.

.

.

.

.

.

.

.

4 4

4.11 Reduction in Shor t Ter m Debtto GDP Ratio (end Mar ch)



Dr. Tarun Das 45

10.2

8.3

7.0

3.94.3

5.4

7.2

5.4

4.44.0

3.6

2.8

4.44

6.1

7

4

4 5 4 5

4.12 Reduction in Shor t Ter m Debt toTotal Exter nal Debt Ratio (end Mar ch)



Dr. Tarun Das 46

382

126

98

24 21 30 30 19 15 11 9 5 6 6 5 4

4

4

4 6 4 6

4.13 Reduction in Shor t Ter m Debt toTotal For eign Exch. Ratio (end Mar ch)



Dr. Tarun Das 47

5.8 9.2 9.819.3

25.2 26.4 29.432.5

38.042.3

55

76

113

146

159167

21.7

4 7 4

Y

i n

U S

$

b i l l i o n

4.14 Substan tial Build-up o f Fo r eign Exchange Reser ves (end-Mar ch)



Dr. Tarun Das 48

2.5

5.3 4.9

8.6 8.4

6.5 6.98.2 8.2 8.6

11.3

13.8

18

16

11

6

2

4

8

2

4

82

2 2

4 4

8 8

2 2

2

2 2 2

4

2 4 2

i n

U S

$

b i l l i o

n

4.15 S teady Impr ovemen t in Impor t Cover o f FER (No . o f mon ths) (end-Mar ch)



Dr. Tarun Das 49

V Strengths, Challengesand Prospects



Dr. Tarun Das 50

5.1 Strengths of Indian Economy Fourth largest economy in terms of PPP-

adjusted GDP after US A , China and Japan Largest pool of technical manpower

Demographic Dividends- Largest share of

working population Largest English speaking population

Huge domestic market

Rich natural resources, well establishedfinancial system, wide spreadinfrastructure, dynamic private sector

5 2 C t i t t G th d



Dr. Tarun Das 51

5.2 Constraints to Growth andCompetitiveness- Domestic

Growing infrastructure constraints

High fiscal deficit

High inflation

Low real deposit rates

High energy intensity

Slowdown of reforms

Weak regulatory institutions

Outdated laws on business

Inflexible Land and Labour markets

5 3 C t i t t G th d



Dr. Tarun Das 52

5.3 Constraints to Growth andCompetitiveness- External

Hardening of international prices of oil,minerals and metals

Greater Risk- luctuations of exchange rate,

interest rate, commodity prices, volatility in

capital flows

Money laundering, abuse of capital,smuggling, international terrorism, drug

trafficking, immoral trade Geo-political issues and market risk

Global warming and environmentaldegradation



Dr. Tarun Das 53

5.4 Implications for Business

World is a global village

Knowledge and Information echnology

are the most valuable assets

Wider choice of resources- domestic/foreign, debt/ equity/ portfolio etc.

Management of risk is an important task

Emphasis on public-private partnershipand risk sharing



Dr. Tarun Das 54

5.5 Need to strengthen Systems for

Management information system

Asset-Liability Management

Good corporate governance Assessment and management of risk

Strengthening audit and accounting

Performance AuditPolicy Audit



Dr. Tarun Das 55

5.6 Concluding Observations

India has gained significantly from WTOcommitments.

There had been significant growth of servicesproduction, employment and exports.

India's focus area in WTO negotiations onG A TS should be to provide effective market access to its professionals and skilled labourforce in various sectors and to bring about a

symmetry in the movement of capital andlabour.



Dr. Tarun Das 56


India has comparative advantages in healthcare, software, construction and engineering,

legal and accountancy, and it would beadvisable to negotiate greater market access

for its professionals in these sectors. The availability of market access alone would

not be fruitful if the qualifications to providethese services from Indian Institutions are

not recognized abroad. A t negotiations, it needs to be ensured that

standardization of these qualifications aresorted out to protect our interest.



Dr. Tarun Das 57


Social obligations in the case of services suchas telecom and banking (serving rural areas)and air transport (linking far-flung areas)have to be carefully nurtured.

For effective market access to professionals,India should negotiate for the following: Economic Needs Test should be eliminated.

Social security contributions required fortemporary persons needs to be corrected.

A dministration of visa regimes may be mademore transparent.

Specific sectoral commitments in line withrequirements of developing countries.



Dr. Tarun Das 58


A s the first generation reforms take root andsecond generation reforms unfold, India is

emerging as a favourite destination forforeign investment, and a land of immense

opportunity for all. India should maintain its open door policy ingoods and services production, investment and trade.

Carried to their logical ends, reforms wouldmake India as one of the most dynamic andfastest growing economies of the world.



Dr. Tarun Das 59

6.1 Review Questions1. (a) What are the major indicators of

globalization?(b) How has India progressed towardsglobalization in the post reforms period?

2. What has been the impact of globalization onIndia¶s services production, investment and

trade?3. Discuss major characteristics of reforms in

India since 1991. How have these helped inservices production, FDI and trade?

4. What are the major factors encouragingIndia¶s services production, FDI inflows andtrade?



Dr. Tarun Das 60

Thank you

Global Services-22!23!24 Prof. Tarun Das

Documents

Transcript of Global Services-22!23!24 Prof. Tarun Das