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India
supposedly came out on top at the recent WTO round in Doha,
Qatar. But unfortunately, our lack of a stand on crucial issues
like e-commerce and trade in IT education could result in
egg all over our face soon, warns Vineet Joshi
 While
many have cheered Union commerce and industry minister Murasoli
Maran for his tough stance at the Doha WTO summit, which led
the world community to endorse India’s views on issues
like investment, competition policy, trade facilitation, transparency
in government procurement, modification of TRIPS and anti-dumping
norms, there doesn’t seem to be much to celebrate on
the IT front.
The rigid stance taken by India to block negotiations on any
new issue in the WTO forum, if not any thing
else, is clearly reflective of our lack of preparedness and
understanding of two emerging yet crucial issues for India’s
IT industry, and also the global economy e-commerce and trade
in IT education. Though by sheer fortune these topics were
not taken up at Doha, experts claim they will be crucial in
the next round, and have the potential to dominate ministerial
talks in 2003.
Though some in the government circuit believe that e-commerce
and trade in education are not as important for India as agriculture,
textiles and trade related issues, others are of the opinion
that the government was pretty much clueless on these subjects.
The official stance is to wait and watch for developed countries
to take a position and then react. But, considering we have
lost many battles on negotiating tables because of delays
in action and lack of comprehensive knowledge on the subject,
this may be a dangerous approach to take.
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| P D kaushik suggests
that India should go along with the US on the e-commerce
issue in the WTO |
“We
had other pressing issues like textiles, patents, health,
food security, development dimension of agriculture to stage
in WTO which required immediate attention. E-commerce and
trade in education are crucial to India’s economy and
we have already started groundwork on them. The situation
on e-commerce is slowly crystallising and we are updating
ourselves on developments in the world. Our stand on both
issues will be taken soon,” promises Maran.
Ground realities speak of a different tale though. A report
prepared by Nishith Desai Associates in association with ISPAI,
Nasscom, MAIT and FICCI, deliberating on the appropriate stance
that India should take on the e-commerce issue in Doha found
no takers in the government. The National Institute of Educational
Planning and Administration (NIEPA) was given just a few months
by the ministry of commerce (MoC) to prepare a report on trade
in IT education services. The report did not recommend any
particular stance India should take, but rather, broadly discussed
“issues of concern.”
The first set of reports on e-commerce under WTO from the
Rajiv Gandhi Institute for Contemporary Studies the agency
appointed by the government to look into e-commerce aspect,
reached the MoC just a month before delegates left for Doha.
“These issues need to be discussed amongst trade circles
very strongly. Any point gained or lost in this will be very
crucial in a future trade scenario,” warns Bibek Debroy,
fellow, Rajiv Gandhi Foundation.
The e-commerce question
Of the 142 countries that are WTO members, almost 80 percent
suffer a huge digital divide. And this means the developed
world can force certain laws, which further establish and
strengthen their positions and interests in the New Economy
spearheaded by e-commerce. To understand why this issue is
so important, consider a Nasscom-Boston Consulting Group report,
which states that e-commerce in India will be worth $9 billion
by the year 2005.
It is well known that in the WTO, the power to push one’s
interests depends on the power to influence the world economy
in that area. “India has strengths in e-commerce and
this is one area where we can stand tall and put forward our
interests forcefully,” says Amitabh Singhal, secretary,
ISPAI.
In the last WTO meeting, the US proposed zero-tax on all e-commerce
transactions. Though it was largely believed to be a politically
motivated suggestion, India’s position on this is still
ambiguous. “In this case, the best way is to keep quiet
and let the US speak further on the subject, though we know
India stands a chance to gain a lot in this issue,” says
a source from the MoC.
Right from import/export regulations, subsidies, cross-border
supply, origin of transaction and taxation, e-commerce makes
existing WTO trade laws redundant. “We have to ensure
that divergent views are not
taken by different countries, thereby creating an unpredictable
trade environment. India could form a group consisting of
different member nations and try to formulate a uniform stance
on the issue of e-commerce characterisation,” says Annapoorna
Ogoti, member-technology law division, Nishith Desai Associates.
“Rather
than behaving like an opposition member, India should strive
to be a partner in each and every stance that leading countries
take on this issue,” suggests Dr P D Kaushik, fellow,
Rajiv Gandhi Institute.
But not every one agrees. “It is important for us to
prepare our own stance in the case of IPR, privacy, tariff,
etc. Else, we will get reduced to being followers,” warns
Vinnie Mehta, director, MAIT. Another issue that India should
critically look into is whether to suggest amending of existing
rules under WTO or to start fresh negotiations to frame a
new set of rules for e-commerce.
Some important institutional arrangements suggested by Nishith
Desai Associates in their report to the MoC are: India should
negotiate the removal of market access barriers in key e-commerce
markets and India should urge WTO member nations to adopt
a legal framework for e-commerce issues to cope with WTO obligations
in the event e-commerce is included within the purview of
GATT/GATS.
What of IT education?
The issue of internationalisation or liberalisation of education
under WTO is also looming large, which unfortunately is at
odds with the current structure in India where education is
subsidised and a social subject.
Though the discussion in this area at the Seattle round was
a fiasco, and not too much was discussed at Doha, it is believed
that this will be a pressing issue in the next round.
“The
government needs to determine immediately to what extent we
need to liberalise, what inputs are required before doing
that and how we are going to strengthen our own education
system before opening up the sector,” says Dr G D Sharma,
senior fellow and head, NIEPA.
Again, though this issue has been under discussion for the
past two years, the government has yet to formulate any stance.
“It is necessary that we examine the proposals and prepare
for meaningful negotiations to protect our interests,”
says Prof D N Rao, School of Social Sciences, JNU, Delhi.
Though the consensus amongst academia and government quarters
is to first open up higher education, starting with IT education,
the data/reports and studies available with the government
are inadequate to work on any final agreement.
“There
is an urgent need to take an informed decision and have clear-cut
definitions. IT is one area where we can export and gain a
big advantage in the world scenario. We need to analyse our
strengths vis-a-vis developed countries and prepare negotiations
points so as to get more by giving away little,” says
an official from a premier IT education institution in India.
The US is pushing hard to enlarge the scope of the definition
of educational services, which will include testing and training,
skill assistance programmes and education for leisure. “We
have to very carefully analyse their stand as developed countries
have honed skills for these kind of educational services and
dominate the education testing system. If their kind of testing
measures become the standard, it will surely disrupt normal
functioning of Indian standards like NET, UGC exams, etc,”
says Sharma. Experts believe a smarter decision would be to
put IT education under the microscope, evaluate every strong
and weak point, and develop the industry to a point where
it is able to take international pressure.
The coming years and growth of technology will only increase
the complexity of both the e-commerce and the trade in IT
education issue. The Indian government needs to evolve its
stance on these issues quickly and stop resting on laurels
earned in Doha. Over to you, Mr Maran.
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