GATS & ITS IMPACT ON INDIA

MAIN PURPOSE OF THE GATS

• Credible and reliable system of international trade

rules.
• Ensuring fair and equitable treatment of all
participants.
• Stimulating economic activity
• Promoting trade and development through
progressive liberalization.
IMPORTANCE OF THE SERVICES
SECTOR TO THE ECONOMY
Economic performance

Development

Employment Opportunities

Consumer Choice

Technology Transfer
SERVICES AREA COVERED IN GATT

 Any sector (160) in any service except:

- Services supplied in the exercise of governmental authority (fire,

police
- Traffic air regulations
DIVISION OF SERVICE SECTORS

 1. Business services (including professional and computer services)

2. Communication services.
3. Construction and Engineering services
4. Distribution services (e.g. Commission agents, wholesale & retail
trade and franchising)
5. Education services
6. Environment services
CONT..
 7. Finance (including insurance and banking)services
8. Health services
9. Tourism and Travel services
10. Recreation, Cultural and Sporting Services
11. Transportation Services, and
12. Other services not elsewhere classified.

These 12 areas are further divided into 161 sub-sectors

KEY PRINCIPLES OF GATS

 Non discrimination

 Market access

 Transparency

 Temporary exemption

 Lock-in effect
Four Modes of Supply Under GATS
The GATS agreement covers four modes of supply for the delivery of services in cross-border trade:
Mode 1: Cross-border supply
Mode 2: Consumption abroad
Mode 3: Commercial presence
Mode 4: Presence of a natural person
Criteria Supplier Presence
Service delivered within the territory of the
Member, from the territory of another
Member
Service supplier not present within the
Service delivered outside the territory of territory of the member
the Member, in the territory of another
Member, to a service consumer of the
Member
Service delivered within the territory of the
Member, through the commercial presence
of the supplier
Service supplier present within the territory
of the Member
Service delivered within the territory of the
Member, with supplier present as a natural
person
OBLIGATIONS UNDER THE GATS
(a) General obligations
 MFN Treatment
 Transparency

(b) Specific Commitments

 Market Access
 National Treatment
SPECIAL PROVISIONS FOR
DEVELOPING COUNTRIES
 General structure of the Agreement
 Facility participation of developing countries
 negotiate commitments for strengthening of developing countries
 access to distribution channels and information networks
 liberalization of market access
GATS NEGOTIATIONS AND INDIA
 Forerunners of services trade liberalisation
 Growing importance of the services sector in its economy
GATS NEGOTIATIONS AND INDIA
Main Areas
 telecommunications,
 finance,
 parts of the energy sector,
 distribution (retail)
 courier services

Substantial Sectors
 construction and related engineering services
 maritime transport services
 energy and telecommunications.
POLICY SUGGESTIONS FOR INDIA

 Hold back any further ambitious offers in services

 Refrain interests in agriculture
 Refrain non-agricultural market access
 Survival of many domestic industries
GATS EXCEPTIONS

 GATS cannot override national policies designed

to:

 Protect morals or maintain order

 Protect life or health
 Prevent deception and fraud or deal with
contract defaults
 Protect individual privacy and confidentiality
 Secure safety
CONCLUSION