CONSTRUCTION OF A SERVICES TRADE RESTRICTIVENESS INDEX
 


 


DESCRIPTION: Ministry of Commerce and Industry (GOI) in association with IIFT, is conducting a study to develop a sector-specific Services Trade Restrictiveness Index (STRI) by quantifying information on regulations that act as impediments to trade in services. This study will help in Government negotiations in trade agreements. To contribute to this project, IIFT invites you to complete this short survey. The objective is to find out - Which policy areas, when restricted, represent the greatest obstacles to international trade in services?

Please consider the following scenario:

There exists a leading XX service firm from country A providing services to both domestic and international clients. Given its success at home and abroad, the firm decides to expand its operations to a new market. It has identified two countries that seem equally attractive in terms of market opportunities. To decide on which one of the two countries to explore, the leading firm has grouped various trade restrictive regulations into five policy areas. The firm is seeking your expert advice regarding the importance of the five policy areas in order to select which new market to supply. The details about these areas are tabulated below

 

S. No.

Policy Area

Measures (Regulations) included

1

Foreign Entry Restrictions

 
 
  • Limitations on foreign ownership
  • Screening requirements in the foreign country
  • Quotas regarding the number of firms permitted to practice
  • Conditions regarding subsequent transfer of capital
  • Restrictions on the type of shares or bonds held by foreign investors
  • Restrictions on cross-border mergers and acquisitions
  • Restrictions on cross border data flows
  • Nationality/Residency requirement for Board of Directors/ Managers
  • Localisation Requirements
 

2

Restrictions on Movement of People

 
  • Labour market tests: intra-corporate transferees, contractual/ independent service suppliers
  • Quotas: intra-corporate transferees, contractual/independent service suppliers
  • Duration of stay of different categories of service providers viz. intra-corporate transferees, contractual suppliers
  • License or authorisation required for practice
  • Domicile required for License to practice
  • Laws/regulations recognizing qualifications gained abroad
 

3

Other Discriminatory Measures & International Standards

 
  • National Treatment
  • Discriminatory taxes/subsidies/government procurement
  • Restrictions on the use of foreign firm names
  • Laws, regulations imposing standards that deviate from international standards
 

4

Barriers to Competition

 
  • Limited rights accorded to foreign suppliers vis-à-vis that of local firms
  • Regulation of dominant firms with the objective to ensure market access on reasonable terms for new entrants
  • Whether the government can overrule the decision of the regulator
  • Restrictions on advertising
  • Minimum capital requirement
  • Fee-setting: mandatory minimum and/or maximum fees
 

5

Regulatory Transparency & other administrative requirements

 
  • Regulatory efficiency
  • Availability of single contact points
  • Timely publication of regulations
  • Time required to obtain a visa, number of documents required for/cost of obtaining a visa
  • Multiple entry visa for business visitors
  • Number of mandatory procedures to register a company, cost to complete official procedures to register a company