Addressing New Service Sector in WTO/FATs: Express Delivery and India

The service sector is evolving. New services and new modes of delivering existingservices have increased the complexities of services negotiations in the WTO and inFTAs.The WTO negotiations focus on market access but FTAs tend to go beyond marketaccess to seeking regulatory commitments from trading partners. India is a proponentof services liberalisation both in the WTO and through bilateral/regional agreements.In this context, this paper examines how new service sectors like express deliveryservices (EDS) are addressed in WTO/FTAs and its implications for India.Express delivery services are one of the fastest growing sectors in India. It plays acrucial role in trade facilitation and in enhancing the global competitiveness of Indianindustries. At present, there are no FDI restrictions and the country can undertakemarket access commitments in WTO and in its FTAs. The proponents of liberalisationof express delivery services also seek commitments in complementary services liketransport and warehousing. The study found that since the autonomous liberalisationis more than India’s offers in the Doha Round of the WTO negotiations, India is in aposition to broaden its commitments in the WTO.One of the core issues for India is that domestic regulation of postal services isevolving. India Post offers courier/EDS services. The Department of Posts is in theprocess of framing a new regulation that is likely to affect the courier/EDS industry.Based on a primary survey, this study found that the regulation should be transparentand fair; it should clearly define the reserved area and distinguish between UniversalService Obligation (USO) and competitive services. It should also mention how theUSO will be funded. The regulation should encompass global best practices likeremoval of cross-subsidisation and should facilitate competition. The need for a postalregulatory regime will arise if the public postal service provider is privatised. The regulator should be independent. The objective of the new regulation should be to laydown a reform path for India Post and the primary role of the regulator should be tomonitor the USO.