Centre may set up agency for analysing services trade data

Overall trade deficit declined to $48.86 billion in FY’16 due to net export of services worth $69.6 billion.

The Centre will soon establish an institutional framework for better collection and analysis of data on India’s services export and import.

The framework is likely to include setting up of a nodal agency for international trade data in services, creation of an international services trade business directory, and provisions mandating enterprises to report their international services trade to the proposed nodal agency, according to sources working on the proposed framework. As a deterrent, there could be stringent penalties for misreporting and for failing to report.

New Law

To ensure legal certainty to the framework, there is a proposal to incorporate the above said provisions as amendments to the Collection of Statistics Act, 2008, the sources said. A new law is also being considered as the Collection of Statistics Act is not specific to services sector.

Besides, a few explicit additions on services export and import will be made to the questionnaires already being sent out regularly to enterprises by regulators of service sectors (such as the ones for insurance and telecom) for collection of general data pertaining to these sectors. The idea is to have an independent and comprehensive, enterprise survey sector-wise and based on modes of supply of services.

The nodal agency on services trade data could be the Directorate General of Commercial Intelligence and Statistics (DGCI&S, which currently compiles and analyses only goods trade data) or an entirely new one.

The objective of having the framework is to improve targeting of incentives based on services exports, besides firm up a superior strategy for the country to be used in negotiations on bilateral free trade agreements as well as on regional and multilateral trade pacts.

In 2011, an expert panel was set up by the Central Statistical Office for identifying the gaps in collection and analysis of services trade data. Following the panel’s report, another panel was constituted in November 2013 under the chairmanship of the DGCI&S. The DGCI&S then asked the Delhi-based think-tank ICRIER to submit a report on four service sectors – logistics, audiovisual, professional and telecommunication.

The ICRIER report — with policy recommendations and the problems related to collection and analysis of such data — will be released on June 7.

In a note to ICRIER on the report, reviewed by The Hindu , Commerce Secretary Rita Teaotia has written: “I am certain that this report will help policymakers to draw up the right policies on data collection.”

The services sector accounts for over half of India’s GDP and its foreign investment inflows as well as more than a quarter of its total trade. India has also found a place in the top ten World Trade Organisation-member countries in services exports and imports. Despite services being such a crucial part of the country’s economy, there has so far been no institutional framework on services trade data collection and analysis. The government has been relying on the Reserve Bank of India for services trade data.

Trade balance India has had a positive trade balance in services sector, with exports being more than imports. The commerce ministry had said the net export of services for FY’16 was $69.6 billion. It was lower than net export of services of $76.6 billion during FY’15.

Though India’s goods trade deficit in FY’16 was $118.46 billion, the country’s overall trade deficit (goods and services trade) came down to $48.86 billion thanks to the net export of services worth $69.6 billion. .