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CHENNAI, Sept. 30

THE service sector in India should provide specific inputs to the Commerce Ministry to enable formulation of a medium-term export strategy for the sector, according to Mr H.A.C. Prasad, Economic Adviser, Ministry of Commerce and Industry.

Specific inputs could include export potential available in various services and the destinations, policy initiatives needed, linkage of service sector with commodity sector and short listing of major types of services and destination which present the maximum potential for exports, he said.

Addressing a meeting organised here by the Confederation of Indian Industry, Mr Prasad expressed concern that the level of awareness among those concerned was low about the WTO-linked issues and their impact.

The entrepreneurs should take a proactive stand and apprise the policy makers on the issues that need to be addressed.

Unlike in the manufacturing sector, developing country members in the WTO have increased flexibility on the time needed to push through their demands and make the commitments relating to service sector.

The deadline for initial request for commitments had been June 30, and to make the offer of commitments was March 31, 2003.

India has been asking for increased market access for professionals and skilled persons. Harmonisation of accreditations and titles and mutual recognition agreements, orderly movement of professionals and removal of limitation such as economic needs test in State residency were some of the major issues.

Developed countries used some of these measures to limit access while seemingly opening up their services sector, Mr Prasad said.

For instance, Sweden and Japan, which have apparently opened up the legal services, insist that the legal education should have been acquired in their respective countries. The US enters into free trade agreements and into the `free trade agreement of the Americas' with its smaller and economically weaker neighbours, he said.

India should have an `internal plan' and the State Governments have a crucial role to play, he said. There was a demand internationally for education in Indian universities and colleges.

Issues such as quotas for international students need to be addressed. India should also address its limitations, he said.

For instance, the US has opened up its ship maintenance services. But it is unable to utilise this opportunity because the required capacity is not available.

The potential areas of growth include information technology, software and hardware, medicine-related consultancy services and satellite mapping.

Size and scale of economies were a major limitation in manufacturing sector. But in the services sector, the small and medium enterprises had a major advantage and India could exploit the opportunity if an effective export strategy is pushed through, Mr Prasad said.

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