India, Mode 4 and GATS

India and Mode 4 under GATS

India has made significant progress in its Mode 4 commitments under the India-Korea Comprehensive Economic Co-operation Agreement. Under this agreement, India has granted temporary entry for all four categories of service suppliers. Also, under the agreement, the definition of BV (business visitor) is extended to include temporary entry for negotiating sale of goods, where such goods does not involve direct sales to general public. And in case of ICT (Intra—Corporate Transferee), there is a requirement that the person has been employed for a period of not less than one year.

Another important issue for India in Mode 4 Negotiations is recognition of professional qualifications by its trading partners. India needs to enter into MRAs with the member countries of WTO. MRAs (mutual recognition agreements) enable professional service suppliers who are certified or registered by the relevant authorities in their home country to be mutually recognised by other signatory countries.^[1]

Also, most of the agreements that India enters into with its trading partners have provisions for allowing spouses and dependents to work in the partner country.

GATS Visa and Work Permit

Since 2000, India has mooted for GATS Guidelines on Visas and Work Permits. India has also proposed for a special visa for its professionals called the GATS Visa. It is said that some developing countries like India have a strong comparative advantage in the international provision of labour intensive services, such as software, health and education services. Increased liberalization of Mode 4 service provision is one important way in which these developing countries can take advantage of international services trade.^[2]

The key features of India’s proposal are:^[3]

1. In order to minimize the risk of Visa Abuse, the GATS Permit holders should be allowed to convert to Permanent Status.

2. The GATS Visa should be available for all workers covered by member’s Mode 4 Commitments.

3. Time frames need to be strictly adhered to for the processing of visa with added flexibility for shorter notice visas.

4. There must be ‘adequate in-built safeguard mechanisms’ to prevent visa holders from entering into the permanent labour market.

Economic Needs Test (ENT) and India

“Economic needs test” is a test that conditions market access upon the fulfilment of certain economic criteria. The Indian stand on this issue is that there exists a ‘considerable asymmetry’ in the commitments between different modes of supply with various limitations such as wage parity, economic needs test etc. that are used to frustrate the level of commitments. The Economic Needs Test (ENT) is an artificial barrier preventing free movement of labour. ENT Conditions are usually vaguely defined, leaving complete discretion in their application. This clearly reduced predictability and the certainty of the commitment.^[4]

India also believes that “another barrier in the ability of developing country professionals to supply services in developed county markets is the lack of recognition of professional qualifications and licensing requirements which either prevent market access for the foreign service provider causing a rejection of the work permit or visa application, or may limit his scope for work to specific activities once he enters the overseas market, preventing him from practising”.^[5]

International Trade Law Notes

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[1] Arpita Mukherjee and Tanu M. Goyal, Examining Mode 4 Commitments in India and the EU’s Agreements: Implication for the India-EU BTIA, Working Paper No. 396, Indian Institute of Mangement, Bangalore, 2013.

[2] Chanda, Movement of Natural Persons and the GATS in Hoekman et al. (eds), Development, Trade and the WTO (WB, 2002).

[3] Young, Where Next for Labour Mobility Under the GATS in Sauvé (ed), GATS 2000: New Directions in Services Trade Liberalisation (Brooking Institute, 2000)

[4] Economic Needs Tests, Note by the Secretariat, S/CSS/W/118.

[5] Chakravarthi Raghavan, India moots GATS guidelines on visas, work permits, South-North Development Monitor (SUNS) (2000) available at http://www.twnside.org.sg/title/visas.htm