The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval for notification of Preferential Treatment by India to Least Developed Countries (LDCs) in Trade in Services in the WTO.

India will notify preferential treatment to the LDCs in Trade in Services in respect of:

1. Article XVI of the GATS (Market Access);

2. Technical Assistance and capacity building; and

3. Waiver of visa fees for LDC applicants applying for Indian Business and Employment visas.

The preferences will be bound with validity for 15 years from the date of notification by India.

A generous offer in Trade in Services by India should win the country goodwill of LDCs. India has already made a very generous offer to LDCs in the area of Trade in Goods in the form of a Duty Free Tariff Preference (DFTF) scheme. An equally generous offer in Trade in Services will help India preserve and consolidate its leadership position on LDC issues. Further, given the development dimension of the Doha Round of the WTO, it is important that India makes liberal offers to LDCs in Trade in Services also. Moreover, several of the LDCs are located in South Asia while majority are in Africa with whom India maintains special relations.

India's preferential treatment to the LDCs in Trade in Services would involve a cost of ₹ 6.5 crore annually on account of waiver of visa fees and ₹ 2.5 to 3 crore, per annum, for providing training in management and technical consultancy courses to LDC applicants. As regards offers under Article XVI of the GATS (Market Access) is concerned, there are no direct financial implications.

Background:

As per the WTO mandate, decisions of the WTO Ministerial Conferences and requests made by the Least Developed Countries (LDCs), developed country and developing country members of the WTO, in a position to do so, were to voluntarily consider providing LDCs preferential treatment in Trade in Services.

Preferential treatment for least developed countries in trade in services: binding market access, capacity building and visa fee waiver. India will notify preferential treatment to Least Developed Countries in trade in services covering market access under Article XVI of the GATS, technical assistance and capacity building, and waiver of visa fees for LDC applicants for Indian business and employment visas, with these preferences bound for fifteen years and the non-market-access components entailing identifiable annual fiscal costs.