The Hindu Business Line : For a win-win situation...<br> Manner of trade negotiations in services has to change: Kamal Nath

STRESSING on the need to change the manner of negotiations in services trade under the World Trade Organisation (WTO) for a win-win situation, the Union Minister of Commerce, Mr Kamal Nath, said here on Thursday that India favoured a plurilateral approach.

Speaking at the CII Partnership Summit 2006 session here on `Trade in Services: Dynamics Are Different', the Minister, in the context of off-shoring of jobs to India, made it amply clear that India has not made any offer on legal services at the WTO negotiating platform.

He clarified that a committee, comprising legal experts from India and the UK to examine the issue of offshoring of legal services, has already submitted its report and the Government was now examining it. He said, "We need to make absolutely sure that it will not affect our domestic interests."

Commenting on the position with regard to offshoring of services, particularly legal and accounting, and also education services, while talking to newspersons after his speech at the special plenary, the Minister said as regards to legal services, it could only be the back-end documentation work relating to business services, and that too, after "we have put our own house in order".

Explaining further, he said there was a need to change some laws, like that on partnerships, which restrict the number of partners in a legal firm in India to 20 now. A law firm overseas can have 100 partners, he pointed out.

In education, he said, only a window has been opened, as "we still need to see how it can bring in any incremental value for us".

Earlier, addressing industry captains, he said the very fact that goods and services are perceived differently meant that the sensitivities attached to them too worked differently and, therefore, the dynamics relating to their trade negotiations were quite different. Pointing out that a competitive advantage in goods need not necessarily be extended to services as well, the Minister said, "In seeking to maximise trade gains, countries seek to `make up' for trade deficits through services".

Citing India's own case, he said the country's services exports was actually paying for our large oil bill, thus effectively boosting our foreign exchange reserves.

India's merchandise trade in 2004-05 was $80 billion, and may well touch $110 billion this fiscal, and these exports exceed the value of the nation's non-oil imports.

"Oil has to be imported to meet our energy needs, and this year, our oil bill would be around $45 billion, while the services exports is expected to be around $50 billion."

Presenting his perspective on `Trade in Services' and India's growing strengths in the area of services, Mr Joseph Deiss, Minister for Economic Affairs, Switzerland, said the best way to attract greater foreign investment was to ease the regulatory burden and to improve the general framework conditions for doing business with and in India. He, however, said he was confident that there would be more Swiss investment in India, especially in the knowledge-based sectors.