India and Proposed Trade Facilitation Agreement (TFA) in Services

The Trade Facilitation Agreement (TFA) for smooth cross-border movement of Goods, is already in force since 22 February 2017 as it got ratified by 2/3rd of WTO membership. This agreement was an outcome of the Bali Ministerial Conference, 2013 held by World Trade Organization (WTO).  It enumerates provisions related to expeditious movement, release and clearance of goods. It also puts focus on cooperation among custom and other related authorities on matters related to custom compliance and trade facilitation. In short, TFA aims to remove the bureaucratic delays and red-tapism, thereby promoting smooth cross border movement of goods. The Government of India had established the National Committee on Trade Facilitation as local institutional mechanism for India to facilitate domestic co-ordination and implementation of TFA provisions.

TFA in Services

The TFA arrived at Bali Ministerial Conference is aimed towards trade in goods and does not include services in its ambit. The TFA in services is a proposal to address this lacuna; and was put forward by India. India, as we know, has competitive advantage in services rather than manufactured goods and this proposal of a TFA in Services aims to reduce various bottlenecks like – high fees, complex and opaque procedures, cumbersome licensing requirements – faced by service suppliers. Like TFA in goods, it too aims at removing bureaucratic delays and red tape and promoting free flow of services across border.

India’s stance on TFA in services

India has not only proposed but also is vociferously advocating in favour of TFA in services at the WTO.  Such an agreement, if ratified, would serve India’s interest as service sector contributes to around 60% to India’s economy and and 28% in total employment and TFA in services would help India boost its service exports substantially. It must be noted that not only in WTO but India is also pushing for liberalization of services in other multilateral agreements it is a part of e.g. Regional Comprehensive Economic Partnership (RCEP).