Chennai: According to UNCTAD India is likely to gain $50 billion per year in exports of services from a mere three per cent increase in quota of temporary workers by the developed countries of the Organisation for Economic Cooperation and Development (OECD) under Mode 4 of the WTO negotiations.

Further UNCTAD estimates that India can gain as much as $40-60 billion annually in exports from the global outsourcing boom, that is in the Mode 1 covering business process outsourcing (BPO).

This is among the many conclusions that emerged from the two-day deliberations of the stakeholder consultation workshop titled "Pre-Hong Kong ministerial meeting consultation: GATS negotiations", that was jointly organised in New Delhi by the ministry of commerce and industry and UNCTAD on August 8 and 9, 2005. The event was organised in the backdrop of the forthcoming WTO ministerial conference in Hong Kong, which is expected to be a milestone in the Doha Development Agenda of the current WTO round of multilateral trade negotiations.

The conclusions of the workshop were released at a news conference by Lakshmi Puri, director, 'division of international trade in goods and services and commodities, UNCTAD and R Gopalan, joint secretary, trade policy division, ministry of commerce and industry.

The emergence of India as one of the fastest growing economies in the world is attributable in significant part to the rapid growth of its services sector. India's earning through services exports are estimated at $51 billion in 2004-05 which is a quantum leap from $25 billion in 2003-04.

Between 1996 to 2000 the revealed comparative advantage index for services increased by 74 percent while that of good declined by 15 per cent. India's own perspective on services trade negotiations seems to be based on a mixture of "buoyant self-belief" and recognition of the many developmental deficits and challenges which could impede the full realization of the services sector potential.

The workshop also concluded that GATS (General Agreement on Trade in Services) negotiations offer scope to India to leverage and lock-in autonomous domestic policy reforms and advantage should be taken for obtaining reciprocal concessions from developed countries in sectors and modes of interest to India. For this, both global as well as sector specific strategies will need to be worked out.

While India has clearly defined interests in Mode 1 and Mode 4, it would also need to put into place effective regulatory framework for benefiting from liberalisation in the other two modes of delivery of services viz, Mode 2 (consumption abroad) and Mode 3 (commercial presence which includes FDI).

Demographic changes in the global economy will also generate demand for Mode 4 which would generate opportunities for India. It is important that autonomous liberalisation in Mode 4 by the US and others are bound. The bilateral and unilateral route has also been used for the movement of unskilled labour which is of importance and should be used to push liberalisation in this sector.

As far as professional services are concerned, given the large size of firms in developed countries and lack of viable mutual recognition agreements, there is an inherent asymmetry between the capacity of foreign and domestic firms to supply services. The possibility of domestic suppliers of professional services in the developing countries being crowded out by foreign service suppliers need to be averted.

The architects association of India pointed to resolution of the International Union of Architects recommending the joint participation of local and foreign architects in delivery of services. The inclusion of local architects would need to be made mandatory in the design, documentation and contract administrative services, involving foreign architects in Indian jurisdiction.

Professional services are one of the fastest growth sectors in economies worldwide, achieving double-digit growth rates and increasing internationalization. However, a number of professional services in India, namely legal services are newcomers to the international trade.

Legal profession has been liberalised only in 1991. With this limited experience, legal profession is seeking answers on what would be the possible effects of opening up this sector to foreign participation. Different views have emerged within the profession itself where some felt that drastic liberalisation without adequate regulatory and legal adjustment may be detrimental to the profession. On the other hand, foreign law firms would not be likely to enter those segments of the market where the great majority of Indian law firms are operating today.