Indo-EU relations in IT-ITES: implications for an FTA

Abstract

With increasing globalization, the role of regulations governing trade between nations is becoming more and more important with time. World Trade Organization (WTO), the apex body for legislating these regulations is going through turmoil because of deadlocks between the major stakeholders and hence for India bilateral relations become immense value driver. It becomes utmost important for representative players like India, to know their strengths and weaknesses in various trade sectors: both product and services, to get the best out of the negotiations in WTO and also in FTA (Free Trade Agreement) arena. This project is directed towards a similar effort. Services being one of the most important sectors for India (53% of GDP with growth rate of around 10%) require considerable focus by the Indian policy makers. The high hopes of 9 to 10% growth in Indian GDP, hinges primarily on the growth in Services sector. We look forward to analyze the ITITES sector, which is the flagship sector under services, with respect to India s relation with EU. The project will throw light on what we are good at offering to EU in IT-ITES services and how can we trade that for other services and products from EU in the upcoming FTA negotiations. We will be primarily looking at the problems and the challenges faced by Indian and EU players for the Indo-EU trade in IT-ITES sector and how can we overcome these challenges. This project is part of a bigger study undertaken by Ministry of Commerce, to evaluate all the sectors of Indian Economy for the upcoming FTA negotiations with EU. We are doing a sectoral (IT-ITES) part of this big project. We are hopeful to contribute valuable feedback to Ministry of Commerce from this project, which they can use in the negotiations with the EU in the FTA talks to decrease the barriers and increase the trade between India and EU in this sector.