Abstract
Services are increasingly becoming important in global trade and constitute approximately 21 per cent of the total trade in goods and services (UNCTAD Statistics). Services are also becoming an integral part of current trade negotiations as most of the countries negotiate services market access in their bilateral and regional trade agreements. India and the European Union (EU) are no exception to this.
India and the EU are the two important trading regions of the world. India accounted for around 3 per cent of the global services trade and the EU contributed around 43 per cent to such trade in 2013 (UNCTAD Statistics). The EU is India’s largest trading partner in services having a share of around 13 per cent in India’s total services trade. Both, India and the EU, believe in multilateral trading system along with regional trade agreements to enhance trade among countries. In accordance with this common philosophy, India and the EU started negotiating a Broadbased Trade and Investment Agreement (BTIA) in 2007 but could not complete the agreement owing to various concerns on both sides. This agreement covers a wide range of trade issues, including goods, services, investment, government procurement, sustainable development and labour standards, among others.
This book explores India–EU trade relation from services perspective and analyzes prospects and challenges for trade in various services between these two regions. The services selected for the analysis include infrastructure services (logistics and energy), business services (IT-ITeS), professional services (accountancy), social services (health) and other services (retail and environment). The contributing authors provided a snapshot of the existing regulatory framework in these services and discussed opportunities and challenges for serving in these two markets. The discussion is supplemented by prescribing domestic reforms to overcome these challenges.
After the introductory chapter, the book is divided into three parts. Part I consists of two chapters. Chapter 2 provides an overview of the services sector in India and the EU. It explores the governance structure, institutional set-up, macro-economic and regulatory framework for services in India and the EU. It also provides a snapshot of various EU Directives applicable to services industry. Chapter 3 examines trends and recent developments in trade and investment in services in global as well as India–EU bilateral context. It also highlights reforms to be taken for enhancing trade and investment between India and the EU.
Part II consists of seven chapters covering various services that are important to India and the EU. Chapter 4 focuses on logistics services and provides a detailed analysis of trade and collaboration between India and the EU in such services and the barriers faced in each other’s markets. Given the importance of logistics services in trade negotiations and also in domestic economies, this chapter may be quite useful for the policymakers. Energy services are covered in Chapter 5 by exploring the nature and potential for bilateral energy services trade. It discusses market structure and the existing liberalization in energy services in India and the EU and identifies areas for future collaboration. Chapter 6 covers IT/ITeS services, one of the most important export sectors for both India and the EU. It analyzes bilateral trade and investment flows between the two regions in this sector and explores potential areas of collaboration. Chapter 7 focuses on accountancy services, which are very important from the EU perspective as EU companies are actively seeking market access in these services in India. The author tries to address pertinent issues concerning trade in accountancy services, such as movement of professionals, harmonization of qualifications etc., in this chapter. Chapter 8 caters to a very important service sector—healthcare—which not only contributes to human capital development but also to inclusive growth. The author presents a very useful and detailed analysis of opportunities and challenges in enhancing India–EU trade in health services in this chapter. The author not only analyzes the commercial aspects of this bilateral relationship but also highlights regulatory and other challenges that are hindering such trade. Chapter 9 is devoted to environment services, a sector of great interest to the EU in its trade agreements. It must be noted that the EU is a significant global player in environment services and India is likely to emerge important demander of such services given the government emphasis on smart cities. Chapter 10 examines the potential for liberalizing retail sector under the India–EU BTIA. A significant autonomous liberalization has happened in this sector in India over the years.
Part III, consisting of a single chapter, summarizes the key findings of the book and presents the way forward for the India–EU BTIA. It analyzes the offers made by India and the EU under the GATS, the Doha Round, and their existing trade agreements to assess likely expectations and demands from both India and the EU in the ongoing BTIA negotiations. The prospects for India–EU inter-governmental cooperation are examined at three levels: multilateral, bilateral and between India and individual EU member states.
This book is a very timely contribution to the policy research as India and the EU have recently decided to re-start talks on the bilateral free trade agreement after witnessing bitterness in trade relations over a ban imposed by the EU on certain generic drugs supplied by India. It makes a sincere effort to analyse India–EU trade relations in services and attempts to present a roadmap for enhancing bilateral trade, investment and economic cooperation between these two regions by going beyond the BTIA to examine other ways of improving bilateral relations.
The findings of various chapters are based not only on secondary research but also on insights gained through primary survey of various stakeholders in the selected services sectors. Thus, the policy suggestions to improve India–EU trade relations reflect ground realities of the India–EU bilateral services trade and not just the theoretical constructs of such relationship.
This book should serve as a useful source of data and information pertaining to India–EU services trade for students, academicians, researchers, think tanks and policymakers.