India sends 'request list' for services sector entry

India sends 'request list' for services sector entry

Nazmul Ahsan

India has sought to entry some major areas of Bangladesh services sector, including banking, insurance construction and health, a top trade official said.

New Delhi has recently sent a 'request list' to this effect to the Ministry of Commerce (MoC) for consideration under the 'SAARC Agreement on Trade in Services'.

It has sought government's policy decision on Indian investment in major areas of business in the country's services sector, sources said.

The areas are -- accounting, auditing, urban planning, medical and dental services, advertising, electronic media, rail transport, pipeline transport, construction and related engineering services, educational, environment and investment in the country's financial sector.

Dhaka is yet to finalise its position as far as opening up of the country's service sector to India and other SAARC member countries, a top MoC official said.

He said they will hold a meeting soon with the officials of Bangladesh Tariff Commission (BTC) and National Board of Revenue to identify the area that could be opened for Indian investment.

The MoC will also hold discussions with Bangladesh Bank, private bank owners and other stakeholders to firm up its position.

"We will finalise our position by mid March, this year as Bangladesh has to commit the areas of services sector that would be opened for investment by nations of the regional pact at the next SAARC expert group meeting scheduled for March 30 in Katmandu,'' a BTC high official said.

The eight member countries of South Asian Association for Regional Cooperation (SAARC) inked the deal on trade in services in 2010.

The agreement will follow the formula of positive list approach in opening up markets to each other for trade in services, contrary to the negative list method now being practiced for trade in goods under the South Asian Free Trade Area agreement, a trade official said.

Bangladesh, Afghanistan, Bhutan, Nepal, India, Sri Lanka, Pakistan and the Maldives are the members of the SAARC.

Enhancing investment in service sector among regional countries and increasing local competitiveness and expertise in service-oriented business, are some of the factors that inspired the Bangladesh policymakers to sign deal along with other South Asian economies, trade officials said.

However, a MoC official said the government must be careful at the time negotiation for opening up the service sector.

He said a liberal approach in opening up country's service sector might cause harm to local players, including physicians, advertising firms, radio and television, rail transport, educational services, banks and insurance companies.

The signatories to the agreement are not allowed to discriminate against any of the contracting states in terms of doing or allowing business, while they will avoid causing unnecessary damage to the commercial, economic and financial interests of other contracting states, the agreement said.

Trade officials said the foreign investment to be made in areas of services' sector will get National Treatment as per the provision of the regulation of World Trade Organisation(WTO).

Any investment to be made in Bangladesh by India or other member countries of SAARC in service sector, will be free from any discrimination in terms of taxing, offering tax benefit and other state incentives, an expert on WTO in MoC, said.

Dhaka is also preparing a 'wish list' to be submitted to India and other SAARC members at the forthcoming expert group meeting, a high official said.

"For us, doing business in India and giving India with business opportunity here under the agreement of trade in services are equally important, which don't that much matter as far as other member countries of the regional pact are concerned," a trade diplomat said.

He said wholesale opportunity for Indian service sector investment would be threatening for the country.

Meanwhile, the MoC made a preliminary assessment on the strength and weakness of service sector before the country pledges other countries to invest in service sector.

The findings of the assessment, however, could not be known.