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Govt differs with Singapore's logic to restrict access to IT professionals

Subhayan Chakraborty/New Delhi 03 Apr 17 | 11:59 AM

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India has differed with the Singapore government's logic to restrict access to Indian professionals employed in the information technology sector.

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A media report on Monday suggested Singapore authorities were insisting on the "economic needs test" (ENT), a functionality in trade terms which argues for compliance with certain economic criteria, to deny access to Indian professionals. 

India had signed the Comprehensive Economic Cooperation Agreement (CECA) back in 2005. The agreement has been credited with increasing India's exports to the nation from $4 billion in 2004-05 to $16.9 billion in 2011-12. However, exports have seen a steep decline since then, going down to $ 7.7 billion in 2015-16.

Among all Asian nations, India's services trade is also highest with Singapore, which is a world leader in the field. However, Indian IT services majors established in the island nations have been intimated by the authorities to comply with the principle of 'fair consideration' or in other words to ramp up hiring of locals.

"The ENT issue has been brought to our notice. It is clearly dealt with under the current trade architecture under CECA," a senior government official said under conditions of anonymity.

The chapter dealing with services trade under the CECA clearly mentions the 'Economic Needs Test' multiple times, with every reference arguing for not using the limitation.   

The government is currently reviewing Free Trade Agreements that India has signed with trading partners after the industry voiced concerns about benefits of these pacts for domestic players. These agreements have been signed with several countries, including Asean bloc of nations, Japan and Korea. It is also negotiating similar pacts with several regions, including the European Union, Australia, New Zealand and Canada. 

However, a second review of the CECA has remained inconclusive over the past six years. 

On that note, the lack of mutual recognition agreements (MRA) — whereby countries agree to recognize one another's conformity assessments — in crucial sectors have hit India's services exports, a recent report by a think tank supported by the External Affairs Ministry pointed out.

However, while refusing to comment on the issue of ENT, a Singapore diplomat said the issue of MRAs was being pursued by the Singapore government.

The issue has become a fulcrum of other trade talks that India is currently engaged in such as the Regional Comprehensive Economic Agreement (RCEP) since the nation has significant strength in the fields of Architecture, Medical, Dental, Nursing and Chartered Accountancy, among others. 

According to government figures, Singapore is also the third largest foreign investor in India whereas Singapore received the highest outflow of Indian FDI.

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