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Abstract
The services sector has been the major growth propeller of the Indian economy with the highest sectored contribution in India’s Gross Domestic Product (GDP). However, in recent quarters, in line with general slowdown of the economy, the growth of services sector has also decelerated. Services export growth has also decelerated since 2011-12 and was at 3.4 per cent both in 2012-13 and H1 of 2013-14. However ‘Net Services’ growth which decelerated to 1.4 per cent in 2012-13 picked up to 12.6 per cent in H1 of 2013-14. This paper makes an attempt to analyze the recent performance services sector and list out some important policy issues in this sector. Policy Issues in Services Sector: These issues can be classified into two major categories. The first category is the market access issues for India’s services exports, and the second is related to domestic regulations and policy reforms. While, issues on market access need to be addressed through proper persuasion/ negotiations at the bilateral and multilateral levels, issues related to domestic regulations can be addressed through policy reforms. Market Access Issues: The proposed VISA rules of US, different domestic regulations in our trading partner countries like licensing, state level regulations in different services tax and the buy American legislation, etc. are among the major market access issues.